The dollar index climbed to around 99.5 on Monday, approaching its highest level in more than three months, as oil prices surged past $100 a barrel. The move came amid intensifying fears that a protracted conflict in the Middle East could trigger lasting disruptions to global energy supplies.
Since hostilities broke out last week, investors have been revising their inflation expectations upward, bolstering the view that the Federal Reserve will postpone cutting interest rates. The greenback also drew support from safe-haven flows as the war with Iran entered its second week with no clear resolution in sight, and President Donald Trump demanded Tehran’s unconditional surrender.
At the same time, Iran’s decision to appoint Mojtab Khamenei as successor to his father in the role of Supreme Leader underscored that hardliners remain firmly entrenched in power. Over the past week, the dollar has outperformed gold and other traditional safe-haven assets, further amplifying its appeal to investors.
