The US dollar strengthened against major peers on Thursday, driven by a combination of geopolitical uncertainty and shifting bond market dynamics.
The greenback edged up to $1.1521 against the euro, building on a 0.3% gain from the previous session, while also finding support against the Japanese yen.
This move reflects a market recalibration as investors weigh the risks of an unresolved Iran situation against expectations for Federal Reserve policy.
Rising US Treasury yields provided a key tailwind for the currency, as benchmark rates climbed toward multi-month highs.
The yield surge was partly fueled by earlier oil price spikes, which have kept inflation concerns alive and pushed back expectations for aggressive rate cuts.
Traders are increasingly pricing in a more cautious Fed stance, particularly as the path to a potential Iran peace deal remains unclear.
Any further escalation or diplomatic stalemate could sustain pressure on risk assets and support the dollar's safe-haven appeal.