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Dollar weakens near 101 as inflation worries and growth backdrop clash
The US Dollar Index slid for a second day around 101.00, with safe-haven demand supported by Middle East tensions that escalated after attacks on Saudi oil tankers.
The US Dollar Index, which tracks the greenback against six major currencies, extended losses for a second day and was trading around 101.00 in Asian trade, according to FXStreet.
FXStreet said the downward pressure reflects renewed inflation concerns linked to surging energy costs, set against a softening US economic backdrop. While markets largely expect the Federal Reserve to keep interest rates unchanged at its upcoming meeting, FXStreet noted uncertainty around shifting policy expectations and unclear guidance from new Fed Chair Kevin Warsh.
FXStreet added that downside momentum could be limited by safe-haven demand as Middle East tensions remained in focus. It cited escalation after a US warning to strike Iranian infrastructure if Tehran targets ships in the Strait of Hormuz, with Iran vowing retaliation against US-linked energy assets.
FXStreet also pointed to Iran-backed Houthi attacks, including missile and drone strikes on two Saudi oil tankers in the Red Sea. The outlet said the assault marked the first direct strikes on tankers in the waterway, endangering an alternative export route for Saudi crude and increasing geopolitical risk for markets.
Latest closeWTI crude $87.52 ▲3.1%|Dollar index 101.12 ▼0.1%