The Bloomberg Dollar Spot Index edged slightly higher after Israel said it awaits the green light from the US to resume war on Iran

US business activity picked up in April, fueled by the strongest manufacturing growth in nearly four years as war-related supply disruptions prompted a scramble for supplies

“Output prices rise at sharpest rate since mid-2022,” data released Thursday showed

The prices spiking is a concern, said Andrew Hazlett, a foreign-exchange trader at Monex Inc., about the PMI report

Fund managers rebalancing their global portfolios will have to sell dollars into the end of April as optimism over the potential resolution of the Middle East conflict boosted US stocks, according to Barclays Plc.

USD/JPY fell less than 0.1% to 159.42

Katayama warned that officials are in close contact around the clock with their US counterparts as Tokyo remains on high alert over speculative moves that are keeping the yen weak.

EUR/USD traded little changed at 1.1708; business activity in the euro area unexpectedly shrank for the first time since late 2024 due to a steep drop in the services sector as the Iran war weighs on consumers

“For the ECB next week, oil remains above its March forecast baseline and not too far from the adverse scenario,” said strategist Jordan Rochester at Mizuho International Plc. He said to expect hawkish comments from policymakers as it’s “hard to play it dovish whilst oil is bid and no concrete date for talks”

“We’ve got a ceasefire extension with Iran playing for time and no strong sign diplomacy will prevail this week,” he said

Some information comes from FX traders familiar with the transactions who asked not to be identified because they aren’t authorized to speak publicly

Reporting by Anya Andrianova and Vassilis Karamanis