Dollar hits one-week high as Middle East tensions reignite

The US dollar firmed to its highest level in ​a week against major currencies on Monday as renewed US-Iran tensions and shaky prospects of a peace deal in the Middle ‌East sent investors toward safe havens. The United States said on Sunday that it had seized an Iranian cargo ship that tried to run its blockade while Iran said it would retaliate amid growing worries of a resumption of hostilities. Tehran also said it would not participate in a second round of negotiations that the U.S. had hoped ​to kick off before its two-week ceasefire with Iran expires on Tuesday. “The weekend escalation revives the geopolitical risk premium just as markets ​had started pricing a peace dividend,” said Charu Chanana, chief investment strategist at Saxo, adding that higher oil “is not ⁠just an energy story, it is a growth-and-rates story.” The euro slipped 0.14% to $1.1746 and sterling fell 0.29% to $1.3479. The risk-sensitive Australian dollar sank ​0.3% to $0.7145 in early trading.