Currency Tensions Mount Amid Global Economic Shifts

The dollar regained ground after Federal Reserve minutes revealed no rush to cut interest rates, amid U.S. yield increases and geopolitical tensions lifting oil prices. While U.S. force buildup in the Middle East spurred investor caution, the Australian and New Zealand dollars experienced mixed fortunes, and the yen fell with U.S. investment announcements.

The dollar strengthened on Thursday following Federal Reserve minutes showing reluctance for immediate interest rate cuts. This comes as investors eye the geopolitical tensions in the Middle East that have edged oil prices higher. The dollar maintained gains against the euro and yen, while U.S. yields rose.

Australian and New Zealand dollars depicted a mixed picture with the Aussie holding steady due to stable job data, whereas the kiwi suffered its sharpest dip since last April following the central bank's cautious rate stance. Meanwhile, European and sterling currencies grappled with leadership shifts and potential impacts on financial policy.

The Japanese yen dropped notably amid U.S. investment plans backed by Japan, raising questions on the yen's stability. Holiday-driven light trade in Asia left the yuan steady against the dollar, as markets looked toward crucial economic data releases later in the week.

(With inputs from agencies.)