The dollar index stabilized just below 100 on Tuesday, pausing after coming under pressure in the previous session as investors continued to weigh the economic and inflationary implications of the Middle East conflict and volatile oil prices. The greenback weakened on Monday as a pullback in crude prices helped ease inflation worries, following the safe passage of several tankers through the Strait of Hormuz. Treasury Secretary Scott Bessent also noted that the US is allowing Iran to continue shipping crude through Hormuz, while President Donald Trump has urged other countries to join efforts to protect commercial traffic in the strategic waterway.
Looking ahead, the Federal Reserve is widely expected to leave interest rates unchanged on Wednesday as policymakers navigate uncertainties related to the Iran war. Investors will focus on the Fed’s assessment of the recent spike in energy prices and what it may signal for the inflation outlook and the future path of borrowing costs.
