The U.S. dollar advanced against major currencies Monday as surging oil prices, fueled by the U.S.-Israeli conflict with Iran, spurred a flight to safety. Investors fear a prolonged conflict could disrupt global energy supplies and impact economic growth.
The euro dipped 0.3% to $1.1583, while the dollar gained 0.3% against the Japanese yen, reaching a six-week high. Sterling also fell 0.3% versus the U.S. currency.
"The U.S. dollar always performs well as a safe haven in chaotic times," stated Juan Perez, director of trading at Monex USA. "It also benefits when the United States demonstrates military strength."
Equity markets, bonds, and precious metals declined as concerns grew over the effect of rising oil prices on global inflation and economic expansion. Iran appointed a new supreme leader, indicating hardliners remain in control.
Oil prices, which had spiked nearly 25%, trimmed gains after a report indicated G7 finance ministers would discuss releasing oil from emergency reserves. Brent crude was up 7% at $98.84 a barrel.
Analysts note that Asia may face the brunt of the energy price shock due to its heavy reliance on Middle Eastern oil and gas. Britain and the Eurozone also show significant exposure.
Leading cryptocurrency Bitcoin saw a 2% rise to $68,520, though it remains near recent lows.