Dollar rises against euro for a third straight day

The dollar has gained by more than 1.5% against other currencies and is close to its highest level since November

The dollar rose against the euro for a third straight day on Thursday, inching closer to its strongest levels this year as surging energy prices sparked worries about Europe’s import-dependent economy and drove investors toward the safety of the dollar.

Oil prices rose sharply as Iran stepped up attacks on oil and transport facilities across the Middle East, fuelling concerns of a prolonged war and potential disruption to oil flows.

The rapid increase in energy prices poses a threat to global growth, with economists warning that a prolonged war in the Middle East would further amplify the economic impact.

The world’s biggest energy importers have seen their currencies post the largest losses against the dollar since the start of the U.S.-Israeli war on Iran.

The Indian rupee and yen have shed more than 1.5% each, while the euro and the won have shed 2% and 3%, respectively.

Meanwhile, the dollar has gained by more than 1.5% against other currencies and is close to its highest level since November.

The euro was down 0.5% at $1.1513, not far off its lowest since November.

The IEA on Wednesday agreed to release a record 400 million barrels of oil from strategic stockpiles, which would cover only around 20 days of supply lost due to the disruptions along the Strait of Hormuz, and will take weeks or months to reach markets.

The main thing that matters today is gas and oil, and the euro zone is quite exposed to these things. So, you see the euro selling off across the board, Barclays strategist Lefteris Farmakis said.

A more prolonged disruption in energy markets would pile more pressure on the euro, strategists said.

The pound declined 0.5% to $1.3348, a little above its lowest point of the year so far. Against the yen, the dollar was 0.3% higher at 159.395 yen.

On Thursday, leading cryptocurrency bitcoin dropped 1% to just below $70,000, but was above the multi-year low of $60,008 hit in early February.