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Trump Offers to Release Iran's Frozen Assets in New Proposal
The dollar rose 0.05% as oil prices climbed and traders sought safe assets after renewed attacks on shipping in the Gulf.
Renewed Gulf tensions and conflict with Iran-aligned Houthis are pressuring global oil markets, with Tehran threatening to close the Strait of Hormuz unless the United States meets its conditions.
Investors are purchasing the safe-haven dollar as concerns about the economic impact of the energy shock from the Iran war intensify following reports of separate attacks on shipping on Tuesday.
The British pound remained unchanged at $1.3505 while the euro slipped 0.1% to $1.1534, as economists expect data to show inflation picked up last month after easing in June.
Chris Turner, global head of markets at ING, noted a soft number "should drag market pricing of a September Fed rate hike away from a 50% probability in favour of no change."
Higher Japanese government bond yields signal increasing expectations of a BoJ rate hike next month, underscoring the intention to press ahead with policy normalisation despite recent currency market intervention.