A clerk counts United States dollar banknotes on May 22, 2024, at a money changer in Jakarta. (Antara/Rivan Awal Lingga)
The dollar held firm near a one-week high on Thursday on a Reuters report that the United States had carried out new strikes in Iran targeting a military site, while the yen softened towards a level that triggered central bank intervention last month.The strikes complicated peace talks underway between Washington and Tehran. Earlier on Wednesday, US 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 jointly manage shipping through the Strait of Hormuz as part of a peace deal.
Oil prices rebounded and the safe-haven dollar steadied as hopes of a swift resolution faded, with investors now increasingly expecting the greenback to break higher as the Federal Reserve shifts its focus to battling inflation amid elevated energy prices.
"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."
The euro was a shade lower at $1.1620, while the pound was down 0.1 percent at $1.34176.
