Volatility persisted in the stock markets following a massive sell-off in the technology and semiconductor sectors. This led to a decline in global stock indices and increased demand for the dollar and bonds as safe-haven assets.
The dollar index, which tracks the U.S. currency against a basket of currencies including the yen and the euro, rose to 101.51. This was its highest level since May 2025.
“The U.S. dollar remains the preferred safe haven for investors,” noted Ray Atrill, head of currency strategy at the National Australia Bank.
The euro fell to $1.1363, close to its annual low. The yen is falling despite warnings from Tokyo about intervention. The British pound weakened slightly to $1.3194 following a statement by Bank of England Monetary Policy Committee member Alan Taylor that maintaining high interest rates is the correct response to inflationary pressures.
The Australian dollar remained stable at 0.6918 dollars, having hit an 11-week low due to mixed inflation data that made it difficult to predict whether interest rates would rise. The New Zealand dollar also weakened to $0.5654, a new seven-month low, losing about 0.3%.
The U.S. and Iran disagreed on key aspects of their framework agreement, including nuclear issues and control over the Strait of Hormuz. This cast doubt on the prospects for their fragile peace deal, which also fueled demand for safe-haven assets.
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