Geopolitical risks in the Strait of Hormuz drive the US Dollar Index up 0.3% amid surging oil prices and heightened safe-haven flows.
The US Dollar Index climbed 0.3% to near 101.30 on Tuesday, fueled by escalating US-Iran tensions in the Strait of Hormuz. President Donald Trump’s declaration of a US-led blockade targeting Iranian vessels and Tehran’s warning of strong resistance sent oil prices to a one-month high, boosting demand for the greenback as a safe haven.
Markets now await the US Consumer Price Index report, with headline inflation expected to ease to 3.8% YoY in June from 4.2%. Core CPI is projected to hold steady at 2.9% YoY. Fed Chair Kevin Warsh’s testimony and remarks from other Fed officials later in the session may further influence USD movement.
The dollar strengthened most against the Swiss Franc, reflecting its safe-haven appeal amid the geopolitical uncertainty and rising energy costs.