The US dollar index held steady near 100.96 as escalating tensions in the Gulf region fueled a sharp rise in crude oil prices and renewed speculation that the Federal Reserve may need to raise rates rather than cut them.
The currency’s resilience reflects a broader market shift toward safe-haven assets amid growing uncertainty over energy supply stability.
Oil markets reacted swiftly to the geopolitical developments, with Brent crude climbing on fears of potential supply disruptions.
The surge in energy costs is intensifying inflationary pressures, complicating the Federal Reserve’s policy outlook.
Traders are now pricing in a higher probability of rate hikes in the coming months, reversing earlier expectations for monetary easing.
The dollar’s strength comes as it approaches its best monthly performance in nearly a year, having gained 2.5% in June.