The dollar hovered near multi-month peaks on Friday as investors sought safety amid escalating Middle East tensions. The markets remained unsettled after a tumultuous week, particularly as U.S. President Donald Trump extended the deadline to target Iran’s energy facilities, while disparate accounts of diplomatic progress emerged.
The Wall Street Journal reported on Thursday that the Pentagon is considering sending up to 10,000 additional ground troops to the Middle East, casting doubt on a swift end to the conflict. This added to investor appetite for the dollar, which benefits from its safe-haven status and possible rate hikes driven by persistently high energy prices.
Meanwhile, the yen neared 160 per dollar, the euro faced minor losses, and the Australian and New Zealand dollars faced declines. Analysts predict prolonged disruptions could trigger global recession fears and broader monetary tightening cycles, impacting bonds and yields globally.