Dollar surges on Iran-Houthi oil disruptions

The U.S. dollar strengthened broadly as renewed U.S.-Iran tensions and Houthi attacks on Saudi oil tankers in the Red Sea drove oil prices above $100 per barrel, stoking inflation fears and pushing U.S. Treasury yields higher. The yen languished near a 40-year low above 163 per dollar, despite verbal warnings from Japanese officials and the U.S. Treasury calling for BOJ rate hikes. The euro and sterling weakened, while the Australian and New Zealands also declined. The United States — Federal Reserve faces renewed pressure to hike rates, with markets pricing in a 26% chance of a July hike. The Japan — Bank of Japan is reportedly open to faster rate hikes, but intervention risks remain high. The Trump administration imposed new tariffs on 60 trading partners, adding to inflationary pressures.