Dollar Strengthens Amid Gulf Tensions and Yen Intervention Speculation

The dollar traded near a two-month high as Gulf hostilities impacted risk appetite. Iranian attacks on Kuwait escalated tensions, while the yen hovered close to the intervention-triggering level of 160. Meanwhile, the euro and British pound saw slight gains, and the U.S. economy's resilience bolstered the dollar's strength.

The dollar approached a two-month high on Thursday due to increased tensions in the Gulf, affecting risk sentiment. The Japanese yen hovered close to a crucial intervention level of 160, as traders remained vigilant.

Renewed hostilities saw Iranian attacks on Kuwait causing damage and injuries, while U.S. military strikes near the Strait of Hormuz compounded diplomatic challenges. Despite a ceasefire between Israel and Lebanon, broader peace remains out of reach, keeping oil prices high and bolstering the safe-haven dollar.

The euro and British pound gained slightly, benefiting from potential monetary policy changes as the European Central Bank prepares for a rate hike to tackle inflation. The dollar index remained steady, reflecting a strong U.S. economy amidst global volatility.