US Dollar Nears 2026 Highs on Rising Oil and Inflation

The United States dollar remained near its highest levels of 2026 on Thursday, supported by a surge in oil prices that has intensified inflationary fears and prompted markets to brace for more aggressive central bank policies. In Singapore, the greenback’s strength was felt across major currency pairs as energy market volatility escalated following military actions in the Middle East.

The Euro / U.S. Dollar pair slipped 0.1% to $1.1549, hovering near its lowest point since late 2024. Meanwhile, the U.S. Dollar / Japanese Yen exchange rate saw the yen weaken past 159 per dollar, touching 159.23 as it neared its weakest level since July. Other major currencies also struggled, with the Australian Dollar / U.S. Dollar falling 0.1% to $0.7148 and the New Zealand Dollar / U.S. Dollar sliding to $0.5907. The British Pound / U.S. Dollar declined 0.2% to trade at $1.3385.

The primary driver of the currency market's shift is the deteriorating situation in the Strait of Hormuz. Iran has warned that global crude prices could reach $200 per barrel as its military targets merchant vessels, severely restricting traffic through the vital waterway. Consequently, Brent Crude Oil jumped 6.9% to $98.30, even after the International Energy Agency pledged a record release of 400 million barrels from strategic reserves.

\"The longer that theres no ability to go through, the pressure on prices will continue.\"

Rodrigo Catril, a currency strategist at National Australia Bank, noted that the disruption impacts not only oil but also liquefied natural gas and fertilizers. He emphasized that the market should anticipate continued volatility in energy costs as the conflict persists. Geopolitical tensions remain high as the United States and Israel continue a bombardment campaign. Despite these strikes, intelligence reports suggest the leadership in Tehran remains stable. President Donald Trump stated that Washington is in a strong position regarding the conflict, though he also introduced new economic pressures by launching trade investigations into 16 major partners, including China. This move follows a Supreme Court decision that overturned previous tariff programs.

Financial markets are now pricing in a faster pace of monetary tightening. In the United Kingdom and across Europe, swap rates are rising, with the European Central Bank now expected to hike rates as early as June. In Japan, the weakening yen adds pressure on local authorities, while the Reserve Bank of Australia is seen potentially raising rates in both its upcoming meeting and again in May. In the United States, Fed funds futures indicate a growing probability that the Federal Reserve will maintain current rates through July rather than cutting them.

Risk-averse sentiment also extended to the cryptocurrency market. Bitcoin / U.S. Dollar fell 0.6% to $70,231.21, while Ethereum / U.S. Dollar dropped 0.8% to $2,053.31. In offshore trading, the dollar remained flat against the yuan at 6.8766. New Zealand and other commodity-linked economies continue to monitor the situation closely as global growth forecasts are adjusted downward due to rising energy overheads."}```​Of course! Here's the rewritten news article in a clean, structured, and visually engaging Markdown format: The US Dollar Hovers Near 2026 Highs as Rising Oil Prices Spur Hawkish Central Bank Bets SINGAPORE, March 12 (Reuters) - The safe-haven U.S. dollar hovered close to its strongest levels this year on Thursday as climbing oil prices threatened to spur inflation and force central banks globally to adopt more hawkish policy stances. Currency Market Movements * Euro: Fell 0.1% against the greenback to $1.1549 in early Asian trading, nearing its lowest level since November. * Japanese Yen: Briefly declined past the 159-per-dollar mark, easing as much as 0.2% to 159.23 and approaching its weakest level since July 2024. * Australian Dollar: Dropped 0.1% at $0.7148. * New Zealand Dollar: Slid 0.1% to $0.5907. * British Pound: Down 0.2% at $1.3385. Oil Market Volatility and Supply Concerns Oil market volatility continued to climb as Iran warned that the world should be prepared for crude at $200 a barrel. This follows Iranian military attacks on merchant ships and a significant reduction in vessel traffic through the Strait of Hormuz. The surge in oil prices, driven by a worsening supply outlook, is expected to push up energy costs and crimp global growth. Economists warn that these risks will rise as the duration of the conflict lengthens. Geopolitical Tensions and Trade Investigations * U.S. Stance on Iran: President Donald Trump stated that Washington is in