The US dollar rallied alongside the safe-haven Japanese yen and Swiss franc, with currency markets abruptly reversing direction on news Israel had launched strikes on Iran.
Israel has begun carrying out strikes on Iran, two US officials told Reuters, adding that there was no U.S. assistance or involvement in the operation.
Another report suggested that explosions were heard northeast of Iran’s capital Tehran.
An index that measures the dollar against six other currencies gained 0.4%, and was last at 98.07, in early Asia trading.
Against the yen, the dollar slipped 0.35% to 143 per dollar , while the Swiss franc tumbled 0.39% to 0.807 per dollar.
US dollar sinks as inflation cools
Risk-sensitive Asian currencies such as the Aussie dollar and the New Zealand dollar weakened 0.9% each.
Earlier in the week, the dollar index hit multi-year lows as investors were not impressed by a US-China trade truce, while cooler-than-expected inflation data fuelled expectations of more aggressive interest rate cuts by the Federal Reserve.
The dollar is on track for weekly declines against the yen, the Swiss franc and the euro.
Crude prices , jumped more than $4 on the news as investors priced in potential supply disruptions from the oil-rich region, while gold prices climbed 0.8% to their strongest since early May.
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