The euro traded near its weakest since November while the yen was at levels that have traders guarding against possible intervention by authorities in Japan.
With oil prices rising, the US allowed the sale of some Russian oil products that had been embargoed in Ukraine due to Moscow’s hostility. Iran stepped up attacks on oil and transport facilities in the Middle East after its new Supreme Leader Mojtaba Khamenei vowed to keep the Strait of Hormuz shipping route closed.
“For now, the market has got a new focus. It’s not diversification, it’s inflation, and it’s low growth,” Gavin Friend, chief market strategist at National Australia Bank in London, said in a podcast. “It’s the mixed, toxic combination of high inflation and low growth that’s stuck with us all this crisis.”
The dollar index, which measures the greenback against a basket of currencies, hit its highest level since November, thanks to its safe-haven appeal, but also because the United States is a net exporter of energy.
The index fell 0.04% to 99.63 in early trade in Asia, poised for a 0.8% gain this week. The euro was up 0.13% at $1.1525.
The yen strengthened 0.17% to 159.08 per dollar after touching 159.43 on Thursday, its weakest since January 14. Sterling rose 0.11% to $1.3356. The United States on Thursday issued a new general license to Russia that allows the sale of Russian crude oil and petroleum products on ships until April 11, according to the US Treasury Department’s website.
The Financial Times reported that the Trump administration had burned “years” of critical ammunition since the war began. And in western Iraq, the United States is conducting rescue efforts after a military refueling plane went down, in an incident U.S. Central Command said was not the result of hostile or friendly fire.
The IEA agreed on Wednesday to release a record 400 million barrels of oil from strategic reserves, which would cover only 20 days of supplies lost to disruptions along the Strait of Hormuz, and would take weeks or months to reach markets.
Investors are also focusing on next week’s meetings at the Federal Reserve and the European Central Bank to determine how policymakers will react to a potential energy price shock.
The exchange market showed on Thursday that traders expect the European Central Bank to likely raise rates in June, while the US Federal Reserve could wait until September before cutting rates, up from previous expectations for July, according to data compiled by LSEG.
The Australian dollar strengthened 0.14% against the greenback to $0.7084, while the New Zealand kiwi rose 0.05% to $0.5858.
In cryptocurrencies, Bitcoin rose 1.81% to $71,464.23, as Ether gained 2.48% to $2,114.22.
