Dollar Firms Up on Safe-Haven Demand

2026-03-03 01:49 By Jam Kaimo Samonte 1 min. read

The dollar index strengthened above 98.5 on Tuesday after jumping nearly 1% in the previous session, supported by safe-haven flows amid risks of further escalations in the US and Israeli war against Iran.

A senior US official reportedly indicated that Washington is preparing for a significant ramp-up in attacks on Iran within the next 24 hours, targeting the country’s missile production facilities, drone programs and naval assets.

The greenback also drew support from expectations that rising energy prices, driven by the conflict, will fuel higher inflation and reduce the likelihood of near-term interest rate cuts by the Federal Reserve.

Markets have pushed back expectations for the next Fed rate reduction to September from previous forecasts of July, although two 25 basis point cuts are still priced in.

Meanwhile, elevated energy costs and inflation risks weighed on currencies of other major energy-importing economies, particularly in Europe and Japan.



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