The US dollar has surged to a new 40-year high against the Japanese yen, marking a significant milestone in the greenback's recent rally.
The move comes as renewed strikes in the US-Iran conflict have triggered a reversal in oil prices, reigniting concerns about global inflation and supply chain disruptions.
According to reports from the Straits Times, the geopolitical escalation is the primary driver behind the currency's strength, as investors flock to the dollar as a safe haven amid rising uncertainty.
The euro, meanwhile, has weakened following the European Central Bank's recent policy decision.
The divergence in central bank stances and the differing economic impacts of the Middle East conflict are contributing to the broad-based strength of the US dollar.
The greenback's rise reflects a shift in market sentiment, with traders increasingly pricing in the potential for higher inflation and tighter monetary policy in the US as a result of the geopolitical turmoil.