Geopolitical risks overshadow soft US CPI data, lifting the Dollar Index amid renewed US-Iran military exchanges.
The US Dollar Index (DXY) erased early losses to trade at 100.10 in European hours, driven by escalating US-Iran tensions. Recent military actions by US Central Command and Iran’s condemnation of the ceasefire have raised doubts over the April 8 truce’s durability.
Wednesday’s US Consumer Price Index data showed modest gains, with headline CPI rising 0.5% month-over-month and core CPI up 0.2%. The figures fell short of some expectations but were overshadowed by geopolitical developments. Negotiations for a permanent peace deal reportedly continue, per CNN.
The Dollar’s recovery reflects safe-haven demand as investors weigh the risk of further conflict in the Middle East against subdued inflation signals.