The dollar is preparing to achieve its largest weekly gains in more than a year

The dollar was broadly stable in early Asian trading on Friday, and is on track to record its largest weekly gains in more than a year, with the escalation of the conflict in the Middle East that has boosted demand for safe-haven assets. The euro and the yen remained under pressure after the rise in oil prices as a result of the conflict, which raised the risks of inflation in economies dependent on energy imports and upended expectations regarding the policies of the Federal Reserve (the US central bank) and other central banks. Previous hopes for a calm dissipated, to be replaced by a new wave. From the mystery, after Iran warned that Washington would “strongly regret” sinking an Iranian warship. US President Donald Trump said he wanted to participate in choosing the next Iranian leader, after US and Israeli air strikes led to the killing of the late Supreme Leader Ali Khamenei in the first hours of the war. Tony Sycamore, a market analyst at IG, said in a note: “If the conflict in the Middle East continues at its current pace, it will likely lead to a sustained rise in inflation and a rise in inflation.” The dollar index and a significant decline in the chances of reducing US interest rates. The dollar index, which measures the performance of the US currency against a basket of currencies, fell 0.06% at 99.00, but it is still heading towards achieving weekly gains of about 1.4%, and this will be its largest rise since November 2024. There was no significant change in the euro, which remained stable at $1.1612. While the yen rose 0.06% to 157.5 yen to the dollar. The pound sterling was also almost stable, as it rose only 0.04% to $1.3361. The intensity of the war escalated on Thursday with American and Israeli planes bombing areas in Iran and Gulf cities being attacked again. As for cryptocurrencies, the price of Bitcoin fell 0.26% to $70,956.52, while Ether declined. ​0.27% to $2074.84.