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Dollar stays bid above 101 as Middle East tensions lift safe haven demand

The US Dollar Index was around 101.1 in Asian trade, supported by reports of expanded US strikes and renewed oil gains that raise inflation and higher-Fed-rate fears.

Reported · Written up by our desk · Major Pairs

The US Dollar Index, or DXY, held steady above 101.0 for a second straight day, trading around 101.1 during the Asian session on Monday, as FXStreet said safe-haven demand picked up amid heightened Middle East tensions.

The dollar’s strength was linked to a sudden escalation in the US-Iran situation, including reports that US Central Command launched additional strikes on Sunday evening and that US forces hit more than 300 Iranian targets over a three-night span, including 140 on Saturday.

FXStreet added that conflicting signals from Washington and Tehran about whether the strait remains open have further reduced expectations for continued diplomacy, while Tehran said previous commitments on shipping transit and normalization of Iranian oil exports must be honored before talks resume.

Attention also turns to US inflation data and the Federal Reserve, with FXStreet noting CPI will be watched on Tuesday and traders expecting one more interest-rate increase before year end, alongside Fed Chair Kevin Warsh’s first official appearance before Congress this Tuesday.

Latest closeDollar index 100.97 ▲0.0%

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