Dollar Strengthens Amid Inflation Risks and Iran Uncertainty
The US dollar index (DXY) strengthened on Tuesday after being hit in the previous session, as safe-haven flows returned after Iran denied US President Donald Trump's diplomatic claims. The DXY rose to around 99.42.
In major currency markets, the euro weakened to around US$1.1584, while the pound sterling fell to US$1.3405. The yen weakened, with USD/JPY hovering around 158.98, remaining near the sensitive 159-160 area that frequently triggers intervention warnings from Tokyo. The Swiss franc held strong as a hedge; the SNB chairman expressed readiness for increased foreign exchange intervention to curb the franc's strength. (Referring to the EUR/USD and EUR/CHF reference rates, USD/CHF is around 0.79).
On the inflation front, the Cleveland Fed's Nowcast forecasts a rebound in inflation for March 2026, with CPI at 3.16% YoY and PCE at 3.23% YoY, reflecting rising energy prices. Activity data also reinforces the "stagflation risk" narrative: the S&P Global survey showed the Composite PMI fell to 51.4 (an 11-month low), with manufacturing improving at 52.4 but services weakening at 51.1; cost pressures rose (input costs reached a 10-month high), and the employment index fell below 50.
Source: Newsmaker.id
