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US dollar jumps as Hormuz tensions lift safe-haven demand
The US Dollar Index is pushing toward 101.3, while CPI expectations and Fed testimony later today may add volatility to major pairs.
The US dollar rose sharply in Tuesday trading, with the US Dollar Index (DXY) climbing about 0.3% toward 101.30 as escalating US Iran tensions heightened safe-haven demand and lifted energy prices. FXStreet linked the move to the Strait of Hormuz, after President Donald Trump said it would remain open with or without Iran and announced plans targeting Iranian ships and customers, while Iran rejected the US role and warned unauthorized action would face strong resistance.
Oil’s jump, tied to the Hormuz developments, also fed into currency dynamics. FXStreet said EUR/USD fell toward 1.1380, down about 0.3%, with higher oil costs seen as potentially complicating the Eurozone inflation and growth outlook given its reliance on imported energy.
GBP/USD slid near 1.3350, off roughly 0.4%, as investors leaned into the greenback amid geopolitical uncertainty, and USD/JPY advanced toward 162.40, up around 0.5%, even as the broader risk environment favored haven assets.
Focus later in the session shifts to US policy expectations, with attention on the Consumer Price Index release. FXStreet noted headline inflation is expected to ease to 3.8% year over year in June from 4.2%, while core CPI is projected to stay at 2.9% year over year, and Fed Chair Kevin Warsh and other Federal Reserve officials are also scheduled to testify.
Latest closeEUR/USD 1.139 ▼0.4%|USD/JPY 162.44 ▲0.1%|GBP/USD 1.335 ▼0.5%