Dollar firms on risk‑off flows

The U.S. dollar index snapped a two-day losing streak to trade 0.2% higher at 98.66

The dollar firmed on Tuesday as risk‑off flows ​driven by the Iran war offset a brief rally in the yen following the Bank of Japan’s most divided policy decision under Governor ‌Kazuo Ueda.

The BOJ kept its policy rate unchanged at 0.75%, but a rare 6–3 split – the widest since Ueda took office – fuelled expectations of a possible rate hike as early as June. The yen initially strengthened but reversed course after Ueda’s press conference dampened the growth outlook, leaving it little changed at 159.65 per dollar and 186.90 per euro.

Three dissenting ​board members – Junko Nakagawa, Hajime Takata and Naoki Tamura – voted to raise the policy rate to 1.0%, citing sharply rising inflation ​risks stemming from war‑related energy supply disruptions through the Strait of Hormuz.

The euro was down 0.11% at $1.17085. The dollar strengthened 0.51% to 0.79 against the Swiss ​franc. The U.S. dollar index snapped a two-day losing streak to trade 0.2% higher at 98.66.

We’re having the traditional risk-off correlations since the Iran war – a rise in oil prices, a stronger dollar, higher U.S. yields, lower Fed rate cut expectations, and lower gold, said Eugene Epstein, head of structuring for North America at Moneycorp in New ​Jersey.

Brent crude gained 2.8% to settle at $111.26 per barrel.

Spot gold dropped 1.84% to $4,596.50 an ounce.

Elsewhere, the benchmark S&P 500 index was down nearly 0.5%. U.S. Treasury yields were mostly higher, with the yield ​on benchmark U.S. 10-year notes up 1.7 basis points to 4.354%.