Dollar Strengthens Slightly, Markets Wary of Energy Price Shock
The US dollar index (DXY) edged up around 0.2% above $99 on Wednesday (March 11) after US inflation data showed a moderate increase in February, while markets continued to assess the risk of an escalation in the Middle East conflict and its impact on global energy trade. February's CPI was +0.3% (m/m) and +2.4% (y/y), in line with expectations, but market attention remained focused on the risk of another energy price shock.
EUR/USD held around 1.16, down 0.2% near its weakest level since mid-January, as markets weighed the risk of energy import inflation in Europe, which could limit room for policy easing, although movement was likely limited ahead of further data.
GBP/USD moved choppy and hovered around 1.34, as investors recalculated the risk of an oil supply shock to UK inflation. Oxford Economics estimates that UK inflation could be 0.4 percentage points higher if shipping disruptions in the Strait of Hormuz persist for two months.
AUD/USD strengthened to the 0.716–0.718 range, supported by improved risk appetite and shifting domestic policy expectations, after several major Australian banks began anticipating another RBA rate hike amid energy inflation risks.
USD/JPY held high around 158, reflecting the yen's continued vulnerability to energy shocks as Japan is a net oil importer, although revisions to previous Japanese GDP data signaled domestic resilience.
USD/CHF hovered around 0.778, indicating that the franc does not always outperform the dollar during risk-off periods, as the dollar remains a preferred destination for global liquidity, especially as markets continue to weigh the path of US interest rates amid energy uncertainty.
Source: Newsmaker.id
