US Dollar Holds Near Two-Month High, Iran Conflict a Trigger
The US dollar index hovered around 100 on Thursday (June 11), holding near its highest level in two months. This strengthening occurred after the United States military launched a new attack on Iran, while President Donald Trump accused Tehran of delaying negotiations on a temporary peace deal for too long.
Ongoing geopolitical tensions have prompted investors to seek safe assets. In uncertain market conditions, the US dollar typically finds support as it is considered one of the world's leading safe-haven assets. This has kept demand for the dollar strong even as the market closely monitors the direction of the Fed's policy.
The situation is further complicated by the conflict in the Middle East disrupting energy flows from the Persian Gulf region. The near-total closure of the Strait of Hormuz has raised market concerns about disruptions to global energy supplies. If oil and gas flows are disrupted, energy prices could rise again, adding to inflationary pressures in many countries.
In the United States, consumer inflation in May rose to its fastest pace in more than three years, primarily due to surging energy costs. Although the figure met market expectations, persistently high inflationary pressures have investors remaining wary of the possibility of a US central bank interest rate hike.
Currently, market participants are awaiting the US producer price inflation (PPI) and weekly jobless claims data. These two figures will provide important clues to the Fed's next move. If inflationary pressures remain strong and the labor market remains solid, the US dollar has the potential to remain strong in the short term. (asd)
Source: Newsmaker.id
