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Dollar stays rangebound as investors weigh Middle East risk and Fed outlook

USD/JPY pushed above 163 to extend the yen’s slide to a fresh 40-year low as higher oil prices fed expectations of possible additional Fed tightening.

Reported · Written up by our desk · Major Pairs

Geopolitical tensions in the Middle East, now in their eleventh day of US military strikes and expanding into the Red Sea, helped keep Brent crude near $95 a barrel, but market moves outside energy remained restrained, according to Action Forex. US Secretary of State Marco Rubio, speaking at the ASEAN Foreign Ministers’ Meeting in the Philippines, said Washington remained open to diplomacy with Iran, including an arrangement under which Tehran abandons support for terrorism and pursuit of nuclear weapons. Rubio also said the US would continue protecting commercial shipping and urged other countries to join those efforts, while describing freedom of navigation as a fundamental principle.

The currency market reflected that cautious stance. Action Forex said investors priced a greater chance of further Fed tightening as oil rose, but the US dollar still traded mostly within recent ranges against most major currencies rather than rallying broadly.

The main exception was the Japanese yen, which extended its decline as USD/JPY broke above 163, hitting another 40-year low. Tokyo’s renewed verbal intervention warnings did not appear to change the move, while attention also turned to a packed US earnings calendar, with results from Alphabet, Tesla, IBM, ServiceNow, Texas Instruments and AT&T expected to shape views on corporate spending and the durability of the AI investment cycle.

Latest closeWTI crude $87.52 ▲3.1%|Brent $94.43 ▲3.8%|USD/JPY 162.90 ▲0.3%

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