US Dollar Holds Strong, US-Iran Conflict Heats Inflation Risks
The US dollar index moved closer to 101 on Monday (July 20th), after strengthening for two consecutive sessions. This strengthening was supported by escalating tensions in the Middle East, which pushed up oil prices and rekindled inflation concerns.
The United States military announced it had launched new airstrikes against Iran on Sunday, after three of its military personnel were killed. Meanwhile, Tehran declared the ceasefire with the US had effectively collapsed.
Iran also reported intercepting four ships passing through the Strait of Hormuz over the weekend. This situation has heightened market alertness to disruptions to the world's vital energy routes and added pressure on oil prices.
On the monetary policy front, Cleveland Fed President Beth Hammack also warned of persistent inflation risks. This statement adds to the growing concern that some Fed officials remain cautious about price pressures that have not yet fully subsided.
In terms of market impact, the US dollar has the potential to remain supported as long as the US-Iran conflict keeps oil prices high and interest rate expectations rise. The market now predicts a 53% chance of a Fed rate hike in September, up from 47% previously, although the central bank is expected to leave rates on hold at this month's meeting. (asd)
Source: Newsmaker.id
