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Dollar softens as Middle East jitters compete with easing inflation
The U.S. dollar index slipped 0.05% to 100.9, while Brent crude futures dipped 1.1% but are up nearly 21% for the month.
The U.S. dollar ticked lower on Tuesday as investors weighed escalating Middle East tensions against support from softer U.S. inflation data reported last week, according to Reuters. The balancing act left traders less willing to make large directional bets on the currency.
In currency moves, the euro rose 0.09% versus the dollar to $1.1424, while the yen fell 0.09% to 162.63 per dollar. Reuters said the focus remains on the risk that the conflict broadens, even as diplomatic efforts continue.
Reuters reported that U.S. military strikes on Iran have continued for ten straight nights, renewing concerns, but that a senior Iranian official said Tehran received a mediator proposal for a 10-day ceasefire. At the same time, expectations for where inflation goes next depend partly on how quickly shipping through the Strait of Hormuz returns to normal and whether oil markets stabilize.
Reuters cited data compiled by LSEG showing traders expect at least one Federal Reserve rate hike this year. The dollar index dipped 0.05% to 100.9 after reaching its highest level since July 15, while Brent futures declined 1.1% on Tuesday and have gained nearly 21% this month.
Latest closeBrent $84.94 ▼0.0%|Dollar index 100.71 ▲0.2%