Inflation fears deepen as oil Jumps, strengthening dollar

The U.S. dollar remained strong while the euro weakened as surging energy prices rattled global markets.

The shift followed data released on Tuesday showing that eurozone inflation rose more than expected in February, even before tensions involving Iran escalated.

Global stock markets extended losses on Wednesday, with the dollar hovering near a three-month high in Asia. Investors pulled back from the euro amid growing conflict in the Middle East, fueling concerns over a prolonged spike in energy costs.

The euro declined by 0.2 percent to $1.1590, marking its third straight day of losses after earlier touching its lowest level since late November.

Markets continued their selloff as fears of rising inflation spread across equities and bonds. The escalation came after Israeli and U.S. forces launched strikes on Iranian targets, prompting investors to shift toward safer assets and cash holdings.

Oil and gas prices surged globally as the attacks disrupted Middle Eastern energy exports. Iran’s retaliatory strikes on ships and energy facilities led to navigation closures in the Gulf and production halts stretching from Qatar to Iraq.

Brent crude climbed 1.9 percent to $82.94 per barrel — its highest level since July 2024 — bringing total gains since Friday to 14 percent. European gas prices have jumped 70 percent since the end of last week.

The British pound dropped 0.3 percent to $1.3323.

Meanwhile, the U.S. dollar index, which tracks the greenback against six major currencies, rose 0.1 percent to 99.208 after earlier reaching its strongest level since November 28.

The dollar edged down 0.2 percent against the yen to 157.52. It also gained 0.1 percent against the Chinese yuan in offshore trading at 6.9287 yuan, following mixed February PMI data that showed weaker official activity figures but stronger private-sector results.

The Australian dollar fell 0.6 percent to $0.6996 despite data indicating stronger fourth-quarter GDP growth, while the New Zealand dollar inched up 0.1 percent to $0.5898.

In the cryptocurrency market, Bitcoin slipped 0.4 percent to $67,776.69, and ether declined 0.5 percent to $1,958.81.