The U.S. dollar steadied near a six-week high on Wednesday as investors assess the need for higher interest rates to combat inflation amid the Iran war. The Japanese yen slipped back into intervention territory.
Uncertainty over the Middle East conflict's end has fueled inflation fears and triggered a global bond selloff. The yield on the 30-year Treasury hit its highest since 2007.
President Donald Trump said the U.S. may strike Iran again but suggested Iran wants a deal. The euro traded at $1.1608, near a six-week low. Sterling was at $1.3398.
The Australian dollar fell 0.14% to $0.7097, while the kiwi dropped 0.24% to $0.5822. The dollar index held at 99.306, up over 1% in May.
Traders price in over 50% chance of a Fed rate hike in December. The yen weakened to 159.03 per dollar, near the 160 level that prompted intervention last month.
Analysts warn that intervention risks may only temporarily slow the dollar's rise unless U.S. yields soften.
