The dollar held near a one-week high on Thursday on a report of renewed U.S. strikes in Iran, while the yen softened towards a crucial intervention level.<\/p>\n
Skaman306 | Moment | Getty Images<\/p>\n
The dollar held firm near a one-week high on Thursday\u00a0on a Reuters report\u00a0that the U.S. had carried out\u00a0new strikes\u00a0in Iran targeting a military site, while the yen softened towards a level that triggered central bank intervention last month.<\/p>\n
The strikes complicated peace talks underway between Washington and Tehran. Earlier on Wednesday, President Donald Trump had said he was “not satisfied” on a deal with Iran, and dismissed an Iranian state media report that Iran and Oman would\u00a0jointly manage\u00a0shipping through the Strait of Hormuz as part of a peace deal.<\/p>\n
Oil prices\u00a0rebounded\u00a0and the safe-haven dollar steadied as hopes of a swift resolution faded, with investors now increasingly expecting the greenback to\u00a0break higher\u00a0as the Federal Reserve<\/a> shifts its focus to battling inflation amid elevated energy prices.<\/p>\n “Geopolitics and the subsequent inflation risks remain a key concern,” Alex Saunders, Citi’s head of global quant macro strategy, wrote. “We continue to see a trim in the USD underweight.”<\/p>\n The euro<\/a>\u00a0was a shade lower at $1.1620, while the pound<\/a>\u00a0was down 0.1% at $1.34176.<\/p>\n The risk-sensitive Australian dollar<\/a>\u00a0weakened 0.2% to $0.71305 and the New Zealand dollar<\/a>\u00a0was largely flat at $0.58965.<\/p>\n The dollar index<\/a>, which measures the greenback’s strength against a basket of six major peers, was steady at 99.288, near its highest level since May 22.<\/p>\n Markets will now look ahead to today’s release of the Fed’s preferred inflation gauge, the core PCE deflator, which will help shape the broader interest rate outlook.<\/p>\n