Dollar drifts as US-Iran conflict intensifies, Brent hits $90

The dollar pulled back in Asian trading on Monday as investor confidence recovered, snapping a three-day winning streak that ​began after the conflict in the Middle East escalated last week and lowered ‌risk appetite, Reuters reported.

The dollar index , which measures the greenback's strength against a basket of six currencies, was down 0.1% at 100.69 after three consecutive days of gains against most of its global peers.

The euro was up 0.1% at $1.1444 ahead of the European Central Bank's meeting later this week, while the British pound nudged 0.1% higher to $1.3463 as Andy Burnham prepares to replace Keir Starmer ⁠as prime minister.

Against the yen , the U.S. dollar was flat at 162.335 yen in thin liquidity as Japan observed the Marine Day holiday. The Australian dollar climbed 0.2% to $0.6996, while the New Zealand dollar advanced 0.3% to $0.5858.

Buyers are coming in and supporting some of the riskier currencies," said Fabien Yip, market analyst at IG in Sydney. "We're seeing a bit of a rebound in the riskier currencies like the Aussie, while sterling has also strengthened a little bit," she said. "It's not so much the dollar weakening, as support for other currencies."

Brent crude futures jumped 2.6% to $90.37 a barrel after the U.S. ‌said ⁠on Sunday it had begun a ninth straight night of attacks against Iran after earlier announcing that at least two U.S. military personnel were killed in Jordan.

Against the Chinese yuan , the U.S. dollar was down 0.1% at 6.772 yuan in offshore trade after China kept its benchmark lending rates unchanged for a 14th consecutive month on Monday, in line ⁠with market expectations.

Markets continue to anticipate no change to rates at the Federal Reserve's next meeting on July 29, with Fed funds futures pricing an implied 85.6% probability of a hold, compared to a 61.5% chance a ⁠month ago, according to the CME Group's FedWatch tool.

Cleveland Fed President Beth Hammack on Friday added her voice to a growing chorus of policymakers arguing interest rates may need to rise to ⁠beat back persistent inflation, setting up a charged debate at the Fed's next meeting and the possibility of dissents at Chair Kevin Warsh's second meeting at the helm.

In cryptocurrencies, bitcoin was up 0.2% at $64,637.89, while ether was 0.4% higher at $1,872.71.