The U.S. dollar rose slightly, supported by increased demand for safe haven assets after diplomatic efforts between Washington and Tehran stalled, while investors await upcoming U.S. inflation data amid concerns that rising oil prices could weigh on the global economy.
The Dollar Index, which measures the greenback against a basket of major currencies, gained 0.1% to 97.96 points.
The dollar found additional support after U.S. President Donald Trump rejected Iran’s proposal to end the ongoing conflict, describing it as “completely unacceptable,” and stating that Tehran has not shown any clear commitment regarding its nuclear program.
Trump also noted that the current ceasefire agreement between the United States and Iran is “extremely fragile,” as tensions persist around the Strait of Hormuz, where disruptions have impacted global oil and gas flows, contributing to one of the most severe supply shocks in markets.
Analysts believe that sustained higher oil prices driven by the crisis are strengthening the dollar, as other economies face relatively greater pressure compared to the U.S. economy.
In markets, investors are closely watching this week’s U.S. Consumer and Producer Price Index data for signs of how rising energy costs are feeding into core inflation, which could influence future Federal Reserve policy and interest rate expectations.
In currency markets, the Chinese yuan edged higher after stronger than expected inflation data, while the British pound fell following local election results in the U.K., and the euro slipped slightly against the dollar.
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