Stock markets took a heavy toll on Wednesday as the dollar held firm near a three-month high in Asia, with investors retreating from the euro amidst conflict in the Mideast, which sparked fears of a sustained rise in energy prices.
The euro slipped 0.2% to $1.1590, extending losses into a third day after earlier hitting its weakest since late November.
The development followed data released on Tuesday, which showed eurozone inflation at a higher-than-expected level in February before the start of the Iran conflict.
Financial markets resumed their selloff on Wednesday as growing fears of a surge in inflation rippled across stocks and bonds after Israeli and U.S. forces pounded targets across Iran, prompting a rush for cash among investors.
Global oil and gas prices have jumped as the strikes on Iran disrupt energy exports from the Middle East, with Tehran’s retaliatory attacks on ships and energy facilities closing navigation in the Gulf and forcing production stoppages from Qatar to Iraq.
The benchmark Brent crude oil contract gained 1.9% on Wednesday to $82.94 per barrel, hitting its highest since July 2024 and taking gains since Friday to 14%. European gas prices have been up 70% since the end of last week.
The British pound slipped 0.3% to $1.3323.
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The U.S. dollar index, which measures the greenback’s strength against a basket of six currencies, was up 0.1% at 99.208, after earlier reaching its strongest level since November 28.
Against the yen, the dollar was down 0.2% at 157.52 yen.
The U.S. currency was also up 0.1% versus the Chinese yuan in offshore trade, changing hands at 6.9287 yuan after PMI data for February diverged, with official gauges recording a slump in activity even as a private-sector counterpart blew past estimates.
The Australian dollar was down 0.6% at $0.6996, even as data showed GDP growth for the fourth quarter picked up speed.
The New Zealand dollar was up 0.1% at $0.5898.
Bitcoin was off 0.4% at $67,776.69, while ether fell 0.5% to $1,958.81.
