Dollar Rises to Multi-Month Highs as Middle East Conflict Spurs Safe-Haven Demand

The U.S. dollar rose to multi-month highs on Thursday amid escalating conflict in the Middle East, driving investors toward safe-haven assets due to uncertainty over energy markets and oil supply risks.

Analysts attributed the dollar's strength to heightened risk aversion, potential inflation pressures from rising oil prices, and the Federal Reserve's cautious stance on interest rates. Investors are weighing whether Washington will extend or end its temporary halt on actions against Iran's energy facilities, which has added to market jitters.

The surge in crude prices has intensified concerns about supply disruptions, further bolstering demand for the dollar. Currencies such as the euro and Japanese yen came under pressure as high energy costs raised fears of broader inflationary impacts.

Market participants noted that the combination of geopolitical tensions and energy market volatility has reinforced the dollar's role as a primary safe-haven currency. Any escalation in the Middle East conflict could prolong these dynamics, potentially influencing global monetary policies.