US dollar traded largely flat as escalating tensions between the US and Iran lifted oil prices but failed to drive sustained currency moves ahead of key inflation data. The dollar index edged up slightly, while the euro, sterling and Australian dollar weakened modestly as investors stayed cautious.
Geopolitical risks intensified after renewed missile and drone strikes and concerns over the Strait of Hormuz, pushing Brent crude higher. However, market participants remained focused on upcoming US CPI and PPI data, along with Federal Reserve Chair Kevin Warsh’s testimony, which are expected to provide clearer direction on interest rates.
The Japanese yen declined, with the dollar rising to ¥162.37, near multi-decade lows, after reports that Japan has no immediate plans to adjust pension fund asset allocations. The move dampened expectations of domestic support for the currency, keeping traders alert to potential government intervention.
