The euro weakened in European trading on Monday against a basket of global currencies, extending its losses for a sixth consecutive session against the US dollar and hitting its lowest level in six weeks, as investors continued buying the US currency as a preferred safe-haven asset amid escalating geopolitical tensions in the Middle East, especially following Trump’s latest warnings to Iran.

Oil prices continue to rise in global markets, increasing inflationary pressure on European Central Bank policymakers and strengthening expectations for a European interest rate hike in June.

Price Overview

• Euro exchange rate today: The euro fell 0.15% against the dollar to $1.1608, the lowest level since April 8, from today’s opening level of $1.1625, while recording an intraday high of $1.1626.

• The euro ended Friday down 0.4% against the dollar, marking its fifth consecutive daily loss, following another sharp rise in US Treasury yields.

• The euro lost 1.35% against the dollar last week, recording its first weekly decline in three weeks and its biggest weekly loss since March, due to fears of a renewed Iran conflict and rising global oil prices.

US Dollar

The dollar index rose 0.15% on Monday, extending gains for a sixth consecutive session and reaching its highest level in six weeks, reflecting continued broad strength in the US currency against a basket of global currencies.

The dollar received additional support from rising US Treasury yields, which climbed to their highest levels in a year, as investors bet that the Federal Reserve will raise interest rates at least once this year.

Data released last week in the United States showed consumer prices in April rose at the fastest pace in three years, while producer prices increased at the strongest pace in four years, highlighting renewed inflationary pressure on Federal Reserve policymakers.

According to the CME FedWatch tool, markets are currently pricing in a 45% probability of a Federal Reserve rate hike in December, compared with just over 16% at the beginning of May.

Investors also continue buying the US dollar as a safe haven, as renewed Middle East tensions pushed oil prices higher and weakened risk appetite amid ongoing bond market selling.

Opinions and Analysis

• Analysts at Barclays said in a note: “Risk and bond market conditions appear to be deteriorating, and the environment remains supportive for further dollar gains this week.”

• They added that indications the Strait of Hormuz could remain closed for a longer period are creating upward pressure, noting that the dollar tends to rise between 0.5% and 1% for every 10% increase in oil prices.

• Christopher Wong, strategist at OCBC Bank, said: “In the near term, the US dollar may remain better supported on dips if yields stay elevated and markets continue expecting a more hawkish reaction from the Federal Reserve.”

Global oil prices

Global oil prices rose more than 2% on Monday, extending gains for a third consecutive session and reaching their highest levels in two weeks, amid fears of renewed military confrontation between the United States and Iran and the continued closure of the Strait of Hormuz to international oil tankers.

Latest developments in the Iran conflict

• US President Donald Trump issued a stern warning to Iran, saying that “time is running out very quickly to reach a peace agreement, or there will be nothing left.”

• Trump is preparing to hold a key meeting in the White House Situation Room with national security leaders to discuss plans for resuming military strikes against Iranian energy facilities and infrastructure.

• Trump held a phone call lasting more than half an hour with Israeli Prime Minister Benjamin Netanyahu to discuss options for returning to full-scale military action.

• The UAE announced it is investigating the source of the drone attack, while Saudi Arabia intercepted three drones in Iraqi airspace.

• An Iranian official warned of “surprise scenarios” if the United States resumes military strikes against Tehran.

European interest rates

• Amid rising global oil prices, money markets continue to price in more than a 50% probability that the European Central Bank will raise interest rates by 25 basis points in June.

• Investors are awaiting further economic data from the eurozone on inflation, unemployment, and wages in order to reassess those expectations.

The Japanese yen weakened in Asian trading on Monday against a basket of major and secondary currencies, extending its losses for a sixth consecutive session against the US dollar and hitting its lowest level in three weeks, as fears of a renewed Iran conflict drove investors toward the US currency as a preferred safe-haven asset.

Oil prices continue to rise in global markets, increasing inflationary pressure on Bank of Japan policymakers and strengthening expectations for a Japanese interest rate hike in June.

Price Overview

• Japanese yen exchange rate today: The dollar rose against the yen by 0.2% to ¥159.05, the highest level since April 30, from today’s opening level of ¥158.72, while recording an intraday low of ¥158.68.

• The yen ended Friday down 0.25% against the dollar, marking its fifth consecutive daily loss, due to rising US Treasury yields.

• The yen lost 1.3% against the dollar last week, recording its first weekly decline in three weeks and its biggest weekly loss since February, following US inflation data that came in above market expectations.

US Dollar

The dollar index rose 0.15% on Monday, extending gains for a sixth consecutive session and hitting a six-week high, reflecting continued broad strength in the US currency against a basket of global currencies.

The dollar received additional support from rising US Treasury yields, which climbed to their highest levels in a year, as investors bet that the Federal Reserve will raise interest rates at least once this year.

Data released last week in the United States showed consumer prices in April rose at the fastest pace in three years, while producer prices increased at the strongest pace in four years, highlighting renewed inflationary pressure on Federal Reserve policymakers.

According to the CME FedWatch tool, markets are now pricing in a 45% probability of a Federal Reserve rate hike in December, up from just over 16% at the beginning of May.

Investors also continue buying the US dollar as a safe haven, as renewed Middle East tensions helped lift oil prices and reduce risk appetite amid ongoing bond market selling.

Global oil prices

Global oil prices rose more than 2% on Monday, extending gains for a third consecutive session and reaching their highest levels in two weeks, amid fears of renewed military confrontation between the United States and Iran and the continued closure of the Strait of Hormuz to international oil tankers.

Latest developments in the Iran conflict

• US President Donald Trump issued a stern warning to Iran, saying that “time is running out very quickly to reach a peace agreement, or there will be nothing left.”

• Trump is preparing to hold a key meeting in the White House Situation Room with national security leaders to discuss plans for resuming military strikes against Iranian energy facilities and infrastructure.

• Trump held a phone call lasting more than half an hour with Israeli Prime Minister Benjamin Netanyahu to discuss options for returning to full-scale military action.

• The UAE announced it is investigating the source of the drone attack, while Saudi Arabia intercepted three drones in Iraqi airspace.

• An Iranian official warned of “surprise scenarios” if the United States resumes military strikes against Tehran.

Additional Japanese budget

Japanese Prime Minister Sanae Takaichi is expected to instruct the government on Monday to consider preparing an additional budget package, although the size of the package has not yet been determined.

A government source familiar with the matter told Reuters on Monday that Japan is likely to issue new debt as part of financing a planned supplementary budget aimed at easing the economic impact of the Middle East war.

Japanese interest rates

• Amid rising global oil prices, markets continue to price in an approximately 80% probability that the Bank of Japan will raise interest rates by a quarter percentage point at its June meeting.

• Investors are awaiting further Japanese data on inflation, unemployment, and wages in order to reassess those expectations.

Oil prices rose on Friday as markets monitored the possibility of US President Donald Trump returning focus to the stalled conflict with Iran, following the conclusion of his summit with Chinese President Xi Jinping in China.

Brent crude futures for July delivery climbed more than 2% to $108.25 per barrel by 10:18 a.m. Eastern Time.

US West Texas Intermediate crude futures for June delivery also gained more than 2% to $103.76 per barrel.

Trump said in an interview with Fox News that his patience with Iran was beginning to run out, adding: “I’m not going to have much patience anymore. They have to make a deal.”

He also said Chinese President Xi Jinping wants the Strait of Hormuz reopened, noting that the Chinese leader is unhappy with Iran imposing transit fees on ships passing through the strait.

Trump added that Xi agreed not to provide Iran with military equipment.

In the same context, US Treasury Secretary Scott Bessent said in an interview with CNBC on Thursday that China would work behind the scenes to help reopen the Strait of Hormuz.

“It is very much in their interest to reopen the strait,” Bessent said.

Beijing did not address the Hormuz issue in its official statements following the summit, though China’s Foreign Ministry said on Friday that “the use of force is a dead end” and that negotiations remain the correct path forward.

A ministry spokesperson said: “There is no benefit in continuing this conflict, which should not have happened in the first place,” adding that reaching a quick resolution would serve the interests of the United States, Iran, the region, and the wider world.

Trump also said China had agreed to buy more oil from the United States.

“They agreed they want to buy oil from the United States, and they will be going to Texas, and we’re going to start sending Chinese ships to Texas, Louisiana, and Alaska,” he said.

China has not yet confirmed any agreements related to purchases of US energy, while CNBC said it contacted Chinese authorities for comment but did not receive a response before publication.

Researchers are increasingly using artificial intelligence technologies to help solve some of the biggest challenges facing the energy sector — including, ironically, the massive surge in electricity demand caused by large language models themselves. The current and expected rise in energy consumption from AI data centers is driving a wave of investment into advanced energy alternatives capable of delivering huge amounts of reliable electricity without major greenhouse gas emissions.

Among the technologies being viewed as a potential “silver bullet” is nuclear fusion, which has made major progress in laboratories in recent years, partly thanks to AI tools.

In this context, scientists at Ames National Laboratory in Ames, Iowa, are developing a specialized AI tool designed to model how different materials behave inside nuclear fusion systems, with the goal of improving research methods and making both the scientific process and fusion systems more efficient.

The tool, known as “DuctGPT,” was developed based on an earlier model from the National Institute of Standards and Technology called “AtomGPT.” The “Duct” version combines large language models with physics-based simulations to identify materials capable of withstanding the harsh environment inside a nuclear fusion reactor.

Nuclear fusion — the same process that powers the sun — relies on extremely high temperatures that most materials cannot tolerate. In addition to resisting temperatures reaching thousands, millions, or even hundreds of millions of degrees, these materials must also remain sufficiently ductile to allow practical manufacturing.

Finding the right material remains one of the biggest obstacles preventing commercial nuclear fusion, while also representing a massive opportunity for the scientific team capable of solving the challenge, potentially unlocking a near-unlimited source of clean energy. Identifying such materials requires exploring and modeling an enormous range of possible alloy combinations.

This type of project is particularly well suited to large language models. In a Financial Times report published last year titled “How AI Could Deliver More Energy Than It Consumes,” the newspaper noted that “discovering new materials, catalysts, or processes capable of producing energy more efficiently is exactly the type of ‘needle in a haystack’ problem where AI excels.”

The new tool is already showing highly promising results in fusion research. The team behind “DuctGPT” said the time required to discover new alloys for fusion experiments has been reduced from months of research work to just a few hours.

Scientist Prashant Singh from Ames Laboratory said: “Now when you ask the system to design a material for nuclear fusion with the critical properties required for reactors, it provides the appropriate elemental compositions along with their expected characteristics.”

Although “DuctGPT” is one of the newest and most promising applications of large language models in nuclear energy research, it is not the only one. Another tool called “Diag2Diag” is being used to help monitor and control plasma behavior in fusion experiments, specifically to prevent a phenomenon known as “Edge Localized Mode” or “ELM.”

This instability rapidly erodes the materials surrounding the plasma, creating major challenges in massive and expensive projects such as Europe’s ITER reactor and China’s EAST reactor.

In the United Kingdom, the British government is investing £45 million, or roughly $60 million, to build an AI-powered supercomputer at the UK Atomic Energy Authority campus in Oxfordshire.

The computer, called “Sunrise,” is expected to begin operations next month. According to a report published by Interesting Engineering in March, officials say the system will help scientists better understand the highly complex physics inside fusion reactors.

The report added that combining advanced computing with AI models could allow researchers to test ideas virtually before building extremely expensive experimental systems.

Together, these tools could dramatically accelerate nuclear fusion research at a time when the need for breakthroughs has become more urgent than ever. While investing in unproven technologies remains a high-risk bet, nuclear fusion now appears closer to reality than at any previous point, as scientific breakthroughs accelerate, competition intensifies, and major technology companies move aggressively into the sector.

The enormous and unprecedented energy demand created by artificial intelligence has become so large that the tools needed to address it may also need to be unprecedented — which helps explain why AI solutions themselves may ultimately become the only way to solve the problems AI created in the first place.