Dollar Rises as Middle East Peace Hopes Slip Away This Week

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As trading opened on May 12, 2026, the dollar climbed after fading hopes for a Middle East peace deal rattled markets and lifted oil prices above $100 a barrel.

Dollar Rebounds as Oil Shock Fuels Inflation Fears

The U.S. dollar strengthened against currencies on Thursday after Donald Trump cast doubt on a ceasefire proposal with Tehran, reviving fears of disruption in energy markets. Brent crude traded near $105 a barrel, intensifying concerns that inflation could keep interest rates elevated for longer.

“Peace talks are hanging by a thread,” traders warned as investors rushed toward safer assets. The euro and British pound weakened, while emerging-market currencies stayed under pressure from the greenback.

Inflation Data Takes Center Stage

Attention now turns to the U.S. inflation report, expected to show prices rising 0.6% in April after a 0.9% jump in March. Rising fuel costs kept markets tense ahead of meetings in Asia.