Escalating geopolitical risks and rising U.S. Treasury yields drive demand for the USD, lifting it to its strongest level in two months.
The U.S. dollar strengthened to a two-month high as escalating Middle East tensions and higher U.S. Treasury yields fueled risk-off sentiment. Investors sought safe-haven assets, pushing Brent crude oil above $97 per barrel and boosting demand for the USD amid concerns over energy supply disruptions and inflation pressures.
Emerging market currencies, including the INR, MYR, IDR, and HUF, weakened as yields failed to offset heightened risks. The KRW was an outlier, gaining on official support. Market focus remains on the JPY and potential intervention as the dollar holds firm.
The dollar’s trajectory hinges on further conflict developments, oil price movements, and their impact on global risk sentiment and U.S. consumer behavior.