Dollar holds near 2-month high; yen near intervention zone

Key facts

• The dollar index reached its strongest level since April 7.
• Fresh Gulf hostilities sent oil prices higher and sapped risk appetite.
• The Japanese yen hovered near the 160 yen per dollar level.
• Bank of Japan Governor Kazuo Ueda signaled a high chance of a rate hike this month.
• Bitcoin slid to a four-month trough.

The dollar held near a two-month high on Thursday as escalating Gulf hostilities pushed oil prices higher and reduced risk appetite. The Japanese yen was trading near the critical 160 yen per dollar level, a threshold that has previously prompted intervention warnings from authorities. The dollar index, measuring the greenback against a basket of currencies, was slightly higher at 99.47, having reached its strongest point since April 7 in the prior session. Analysts suggest the dollar's safe-haven status is strengthening due to geopolitical tensions. Meanwhile, a survey indicated that prices paid by U.S. services businesses surged last month, reinforcing expectations that the Federal Reserve will maintain current interest rates for an extended period. Bank of Japan Governor Kazuo Ueda's comments suggested a high probability of an interest rate hike this month if inflationary risks outweigh economic downside risks. Bitcoin and Ether both slid to four-month lows.