The euro benefited, holding above $1.165 at its strongest since mid-May, with the ECB widely expected to hike in September as high oil prices and low Eurozone gas inventories keep inflation concerns alive. Sterling also traded above $1.36 near a February high, supported by 2.9% UK inflation in July and an early confidence lift for new Prime Minister Andy Burnham.

The US-Iran standoff influenced currencies from several directions. Energy risks strengthened expectations for ECB tightening, while Washington’s plan to isolate Iran financially created some safe-haven demand for the dollar and broader US sanctions weighed on the yuan. 

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