The U.S. dollar reached its highest levels in a week during Asian trade on Wednesday, coinciding with renewed strikes on Iran. Meanwhile, New Zealand’s currency experienced a notable increase following the central bank’s decision to raise interest rates and indicate potential further tightening. The greenback strengthened 0.2% to 162.46 yen, marking its fourth consecutive day of gains and reaching the strongest level since July 2. The euro declined by 0.1% to $1.1405, whereas the British pound edged down 0.1% to $1.3351.

Meanwhile, the kiwi dollar experienced a 0.5% increase, reaching highs of $0.5705 following the Reserve Bank of New Zealand’s decision to raise rates by 25 basis points to 2.5% in an effort to mitigate inflation pressures, a move anticipated by most economists. The bank indicated that “some further reduction in monetary stimulus is likely to be required” to manage inflation effectively. The Australian dollar increased by 0.1%, reaching $0.6938. The U.S. dollar index, which measures the currency against a basket of six peers, touched 101.210 for the first time since July 2.

Bids for the greenback, widely regarded as a global safe haven, emerged following the U.S. initiation of a new series of strikes against Iran on Tuesday and the revocation of a licence permitting the country to sell oil after three tankers were attacked in the Strait of Hormuz. “For now, the market is keeping to the playbook that Tehran and Washington are still in a high-stakes game to gain leverage during the temporary truce, and that Tuesday’s incident would not descend back into a full-scale war,” analysts noted in a research report. However, the incident served as a reminder that the genuine risk persists with the impending expiration of the interim ceasefire agreement in mid-August and the critical issue surrounding transit fees in the Strait of Hormuz.

Brent crude experienced an increase of 2.5% to reach $76.03 a barrel during Asian morning trade on Wednesday, marking the continuation of a rally into a second day. The yen inched closer to a new 40-year low following remarks from Bank of Japan board member Toichiro Asada, the only dissenter to the BOJ’s June decision to raise interest rates, who stated that he requires evidence of demand-driven inflation before endorsing additional increases.