Iran Tensions Keep US Dollar Strong
The US Dollar Index (DXY) held steady above 98.00 during the Asian trading session on Tuesday (June 2). The DXY, which measures the US dollar's strength against six major currencies, traded around 99.20, after previously registering moderate gains. This movement indicates that the market remains cautious amid uncertainty about the direction of negotiations between the United States and Iran.
The US dollar received support from increased safe-haven demand following reports that Iran had halted indirect negotiations with the United States. A Tasnim report stated that Iran, along with its "Resistance Front" allies, was preparing to block the Strait of Hormuz and activate additional routes such as the Bab el-Mandeb. If this occurred, this could disrupt global oil and gas supply flows.
Tensions escalated further after another report indicated that Iran had placed additional sea mines in the strait. This situation raised market concerns about the risk of a spike in energy prices, which could ultimately drive global inflationary pressures back up. In such an environment, expectations that the Federal Reserve would maintain high interest rates also supported the US dollar's strength.
Despite this, US President Donald Trump struck a more optimistic tone. He stated that negotiations were ongoing and held open the possibility of reaching a memorandum of understanding to reopen the Strait of Hormuz in the near future. Meanwhile, regional diplomacy continues, including calls from Lebanese authorities for an extension of the ceasefire between Hezbollah and Tel Aviv to cover all of Lebanon. (asd)
Source: Newsmaker.id
