The dollar index rose above 101 on Monday, advancing for a second consecutive session as escalating tensions in the Middle East boosted safe-haven demand for the US currency. Over the weekend, the United States and Iran exchanged fresh missile strikes amid ongoing disputes over shipping in the Strait of Hormuz, pushing oil prices higher and strengthening expectations of further interest-rate hikes to contain inflation.
Investors are now focused on key US inflation data due this week for additional signals on the Federal Reserve’s policy path. Markets currently anticipate one rate increase before year-end. Minutes from the Fed’s June meeting, released last week, indicated that while a few policymakers saw a case for raising rates, they ultimately backed leaving policy unchanged. Meanwhile, Fed Chair Kevin Warsh is set to make his first appearance before the US Congress on Tuesday and Wednesday.
