US-Iran tensions boost dollar, yen near 40-year low

Renewed U.S.-Iran tensions have driven safe-haven demand for the U.S. dollar, which stabilized near recent highs on July 23, 2026. The dollar index was flat at 101.11. Oil prices rose, with Brent Crude futures up over 1.3% to $95.31 per barrel, after the U.S. military launched a new round of strikes on Iran and the Iranian-aligned Houthis claimed military strikes on two Saudi oil tankers as part of a naval blockade on Saudi Arabia, raising the risk of further disruption to Red Sea oil flows. Two-year U.S. Treasury yields climbed to a 17-month high on rising oil prices stoking inflation concerns, which could increase the odds of United States — Federal Reserve interest rate hikes. The Japan — Japanese yen languished near a 40-year low at 163.1 per dollar, with little sign of recovery despite verbal warnings from Japanese authorities and previous yen-buying operations in April and May. The Japan — Bank of Japan is reportedly open to raising rates at a faster pace, but the yen's weakness persists due to broad-based dollar strength and Japan's still-low interest rates. The euro was flat at $1.1412 ahead of the European Union — European Central Bank meeting, which is expected to keep rates unchanged but signal a possible hike in September. Other currencies showed mixed movements: the Australia — Australian dollar dipped 0.1% to $0.6989, the New Zealand softened to $0.5811, and British sterling traded at $1.3373. In cryptocurrencies, bitcoin fell 0.2% to $65,741.43 and ether lost 0.04% to $1,925.36.