FX.co ★ Dollar Finds Support on Middle East Jitters

On Tuesday, the US dollar index rebounded above 98.2, recovering from the previous session's losses. This surge was fueled by increased demand for the safe-haven currency amid rising tensions in the Middle East. The market response followed President Donald Trump's call for a complete evacuation of Tehran in light of ongoing Israeli airstrikes, emphasizing that Iran should have agreed to his proposed nuclear deal. Investors are now focusing on the Federal Reserve's policy meeting this week, where it is widely anticipated that interest rates will remain unchanged. Attention will be on any forward guidance about the future direction of rates, especially as traders reduce expectations of additional rate cuts this year. Concerns over inflation, exacerbated by high oil prices and continuing trade uncertainties, are also impacting market sentiment. The dollar saw broad gains, marking its third consecutive increase against the Japanese yen ahead of the Bank of Japan's forthcoming policy announcement.