Quick overview

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The dollar was close to a 10-month high and set for its largest monthly gain since July of last year as conflicting signals from the US and Iran reduced expectations of a speedy resolution to the Middle East conflict.

President Donald Trump declared that Iran’s new leaders have been “very reasonable as more US troops entered the area and Tehran issued a warning that it would not tolerate humiliation.

The euro found some support amid expectations of rate hikes by the European Central Bank. At the same time, the yen remained close to the crucial 160 per dollar level after reaching its lowest since Tokyo last intervened to support the currency in July 2024.

This month, the Iranian conflict effectively closed the Strait of Hormuz, which is a chokepoint for roughly one-fifth of the world’s oil and gas flows. As a result, markets were shaken, pushing Brent crude toward a record monthly increase. The dollar has benefited from its safe‑haven status since early March, with higher oil prices hurting Japan and the euro zone but insulating the United States.

The Japanese yen strengthened by 0.40 percent to 159.65 per dollar after reaching its lowest level since July 2024 at 160.47 during the Asian session.

The reversal occurred as Japan prepared to threaten yen intervention and hinted that additional currency declines might support a short-term increase in interest rates. Concerns about rising oil prices have caused the yen to fall more than 2% in March. The Australian dollar, which is on track for a monthly decline of 3.8 percent—its steepest since December 2024—was down 0.3 percent at $0.6851. After declining 4.4 percent in March, the New Zealand dollar dropped 0.4 percent to $0.57275.