United States Dollar Index consolidates below 100.00 as bulls await US CPI amid Iran risks
The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, struggles to capitalize on the previous day's positive move and oscillates in a range during the Asian session on Tuesday.
On Tuesday, the US Dollar Index (DXY) remained stagnant in the 99.75 region, as market participants awaited further developments related to the Iran crisis and the release of the latest US inflation data. President Donald Trump refused Iran's demand for compensation for damages incurred during the war, instead blaming Iran for the destruction and resulting casualties. Iran has refused to negotiate with Trump, stating that talks will only resume after his term concludes on January 20, 2029.
The geopolitical tension between the US and Iran raised the risk premium, further bolstering the appeal of the US Dollar as a safe-haven asset. Meanwhile, the US-Iran standoff prevented the Strait of Hormuz from reopening and caused congestion in the Bab el-Mandeb Strait, due to a naval blockade imposed by the Houthis against Saudi Arabia.
This situation further strained supply chains and increased crude oil prices, thus raising concerns about inflation and hinting at a possible interest rate hike from the US Federal Reserve (Fed).
Investors, however, were cautious and opted to wait for additional clues regarding the Fed's future policy decisions. Consequently, the focus shifted to the upcoming US consumer inflation figures, scheduled for release on Wednesday, followed by the Producer Price Index (PPI) on Thursday. These key data points, combined with evolving geopolitical headlines, would significantly impact the US Dollar's near-term performance.
The table below displays the percentage change of the US Dollar (USD) against several major currencies throughout the week. The US Dollar emerged as the strongest against the Japanese Yen. The heat map displays percentage changes of major currencies against each other, with the US Dollar as the base currency and the quote currency listed on the top row.
For instance, if you select the US Dollar from the left column and move horizontally to the Japanese Yen, the displayed percentage change represents the USD/JPY exchange rate.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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