Dollar flirts with new 2026 highs as oil price – Money News
By Saqib Iqbal Ahmed
NEW YORK, March 12 (Reuters) – The greenback rose in opposition to the euro for a third straight day on Thursday, inching nearer to its strongest ranges this yr as surging vitality costs sparked worries about Europe’s import-dependent economic system and drove traders towards the protection of the dollar.
Oil costs rose sharply as Iran stepped up assaults on oil and transport services throughout the Middle East, fueling considerations of a extended battle and potential disruption to oil flows.
Iran’s new Supreme Leader Mojtaba Khamenei on Thursday vowed to keep the Strait of Hormuz closed.
The fast increase in vitality costs poses a risk to international growth, with economists warning that a extended battle within the Middle East would additional amplify the financial influence.
The world’s largest vitality importers have seen their currencies post the most important losses in opposition to the greenback for the reason that begin of the U.S.-Israeli battle on Iran. The Indian rupee and Japanese yen have misplaced more than 1.5% every, whereas the euro and the Korean gained have misplaced 2% and three%, respectively.
Meanwhile, the greenback has risen by more than 1.5% in opposition to a basket of main currencies and is close to its highest stage since November, thanks partly to its safe-haven appeal, but in addition as a result of the United States is a web vitality exporter.
The euro was down 0.5% at $1.1513, not far off its lowest since November.
“A disappointing supply update from the International Energy Agency, and commitment from Supreme Leader Khamenei to keep the Strait of Hormuz closed is to blame,” Benjamin Ford, researcher at macro analysis and strategy firm Macro Hive, mentioned.
“Ahead, we expect EUR/USD can fall to 1.14 with FX markets trading the 2022 Russia-Ukraine game plan,” Ford mentioned.
The IEA on Wednesday agreed to release a document 400 million barrels of oil from strategic stockpiles, which might cowl solely about 20 days of provide misplaced due to the disruptions alongside the Strait of Hormuz, and can take weeks or months to attain markets.
“The main thing that matters today is gas and oil, and the euro zone is quite exposed to these things. So you see the euro selling off across the board,” Barclays strategist Lefteris Farmakis mentioned.
A more extended disruption in vitality markets would pile more strain on the euro, strategists mentioned.
CENTRAL BANK RATE TRIGGER DRAWS CLOSER
Risk urge for food took a additional hit after Trump’s administration on Wednesday launched a new commerce investigation into extra industrial capability in 16 main trading companions, in a transfer aimed toward rebuilding tariff strain after the U.S. Supreme Court struck down the centerpiece of Trump’s tariff program final month.
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