The dollar rose against most major currencies, after renewed attacks in the Middle East stoked inflation fears and increased the possibility of central banks raising interest rates.
Against the Japanese yen, the dollar increased 0.1% to 161.92 yen, while the euro fell 0.1% to 1.1403 dollars, and the British pound fell by the same percentage to 1.3383 dollars, according to Reuters.
The Australian dollar also fell 0.1% to $0.6942, while the New Zealand dollar fell 0.1% to $0.5757.
These moves came after American and Iranian forces launched intense attacks with missiles and drones over the weekend.
At the same time, oil prices rose with the resumption of trading in Asia, as Brent crude futures rose 3.3% to $78.49 per barrel.
Market analyst at IG in Sydney, Tony Sycamore, said that the dollar moved in response to the escalation of tensions at the end of last week and the beginning of this week, noting that the price of crude oil was the main driver.
He added that a rise in energy prices from current levels may revive concerns about inflation and push forward the dates for raising interest rates.
Traders tend, by a slight majority, to expect the US Federal Reserve to raise interest rates twice until the end of the year.
According to the CME Group’s Fed Watch tool, US interest futures indicate a 52.1% probability of two or more interest rate increases by the US central bank’s December meeting, compared to a 47.6% probability on Friday.
The dollar index, which measures the performance of the US currency against a basket of 6 currencies, stabilized at 101.07, after rising by as much as 0.2% from Friday’s closing level, recording its highest level since July 8.
In the cryptocurrency market, Bitcoin fell 0.6% to $63,770.42, while Ether fell 1.1% to $1,801.28.
