The US dollar index held firm at a one-month high on Tuesday, settling at 101.45 after easing 0.07 percent in the session.
The greenback's resilience reflects a cautious stance among traders who continue to price in a slim but lingering possibility that the Federal Reserve may raise interest rates at its next policy gathering.
This positioning comes even as falling oil prices have helped ease some broader inflationary concerns.
The divergence between commodity softness and currency strength suggests that market participants are prioritizing the tail risk of a hawkish policy shift over immediate disinflationary signals from energy markets.
The dollar's performance underscores the sensitivity of FX markets to Federal Reserve expectations.
With the central bank's next meeting approaching, any further clarification on the probability of a rate hike could trigger significant repricing across currency pairs and Treasury yields.