Euro dips as Iran conflict stirs growth fears
U.S. dollar and Euro banknotes are seen in this illustration taken March 24, 2026. REUTERS/Dado Ruvic/Illustration
NEW YORK, March 30 : The euro fell against the dollar on Monday on concerns about the growth impact from an extended U.S.-Israeli war with Iran, while the yen was supported after Japanese officials stepped up currency intervention threats.
Iran described U.S. proposals to end a month of war in the Middle East as "unrealistic, illogical and excessive" on Monday and unleashed more missiles on Israel, as oil prices rose further after Yemen's Houthis entered the conflict.
Rising oil prices have raised concerns about higher inflation. But the longer the conflict drags on, the more damage higher energy costs will have on consumer finances and economic growth.
“Investors are starting to think about the growth side of the equation,” said Noel Dixon, global macro strategist at State Street Global Markets.
“There's starting to be a focus on some of the more vulnerable countries, largely the UK, the EU,” Dixon said. “The sentiment is starting to shift a little bit there in terms of the forward rate expectations.”
The euro fell 0.36 per cent to $1.1466 while sterling dropped 0.54 per cent to $1.3185, the lowest level since December 2.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro,rose 0.15 per cent to 100.46.
The dollar has benefited from a safe-haven bid from the conflict, while the United States is also in a comparatively better position than many peers as a net energy exporter.
The Japanese yen strengthened 0.51 per cent against the greenback to 159.49 per dollar, after earlier moving past the psychologically important 160-per-dollar level, which was its weakest since July 2024 when Tokyo last intervened to shore up the currency.
In the strongest warning yet of a yen-buying intervention, Japan's top currency diplomat Atsushi Mimura said on Monday authorities may need to take "decisive" steps if speculative moves persist in the currency market.
Separately, Bank of Japan Governor Kazuo Ueda said the central bank would closely watch yen moves as they affect the economy and prices, suggesting inflationary pressures from a weak currency could justify raising interest rates in the coming months.
Elsewhere, the Australian dollar fell to a two-month low of $0.6841 and the kiwi dropped to a four-month low of $0.5709.
In cryptocurrencies, bitcoin gained 1.59 per cent to $67,618.38.
(Additional reporting by Stefano Rebaudo; Editing by Joe Bavier)
