FX.co ★ Dollar Holds Decline on Trump Remarks

The dollar index held below 99 on Tuesday, extending losses after a sharp intraday decline in the previous session, as optimism over a swift resolution to the Iran conflict dampened safe-haven demand. President Donald Trump said the US military operation in Iran is nearing completion and progressing well ahead of the initial four- to five-week timeline. He also signaled his intention to waive certain oil-related sanctions and deploy the US Navy to escort tankers through the Strait of Hormuz in an effort to stabilize oil prices. Previously, the dollar had strengthened on safe-haven flows amid concerns that the Middle East conflict and surging oil prices could trigger prolonged economic disruption and a resurgence of inflation. Looking ahead, investors are focused on Wednesday’s February CPI release and Friday’s January PCE price index for further insight into inflation trends, although neither data set is expected to fully capture the economic effects of the Iran war.