The US dollar hit a six-week high on Wednesday as investors came to terms with the possible need for higher interest rates to tackle inflation resulting from the Iran war.The uncertainty over when the conflict may end has fanned inflation fears and triggered a global bond selloff, with the yield on the US 30-year Treasury bond hitting its highest level since 2007.
President Donald Trump said the United States may need to strike Iran again but suggested Tehran wants a deal to end the war that has all but closed the key Strait of Hormuz, sending energy prices soaring and roiling markets.
The dollar index, which tracks the currency against six peers, rose 0.1 percent to its highest since April 7 at 99.47 but was last flat at 99.32.
The index is up more than 1 percent in May due to safe-haven demand and markets pricing in chances of the Federal Reserve hiking interest rates by the end of the year.
The euro fell to a six-week low of $1.158, before recovering to trade little changed. The British pound was roughly flat at $1.3401.
