Dollar Rises Amid Middle East Tensions and Elevated Oil Prices

The dollar saw an uptick on Thursday, nearing a 1-1/2-week high, spurred by escalating tensions in the Middle East involving Iran and the U.S. Despite President Trump extending the ceasefire with Iran, the lack of progress in peace negotiations has pushed oil prices above $100 per barrel, thus affecting global markets.

The clamps in the Strait of Hormuz by Tehran, combined with unresolved issues regarding blockades and nuclear matters, have kept the strategic waterway closed. This closure has resulted in an energy shock that has global economic implications. Meanwhile, European and Asian currencies saw declines alongside U.S. dollar gains.

A Reuters poll suggests that the Federal Reserve is unlikely to cut interest rates within the next six months due to the energy shock further inflaming inflation. Markets are also watching U.S. jobless claims and PMI data for any further economic impact clues.

(With inputs from agencies.)