Dollar Edges Down After Two-Day Surge

2026-03-04 10:02 By Joana Taborda 1 min. read

The dollar index dipped about 0.3% below 99 on Wednesday, after rallying 1.5% over the previous 2 sessions, as traders paused to weigh developments in the conflict with Iran, including a New York Times report that Iranian operatives had offered to discuss terms for ending the fighting, while oil and gas prices eased.

Also, President Trump said Washington would insure and escort vessels transiting the Strait of Hormuz if necessary.

While details of the plan remain unclear, the announcement helped ease some pressure in energy markets.

Meanwhile, the Treasury Secretary said the global 15% tariff starts this week, adding that he expects the levies to revert to their previous levels within 5 months.The recent spike in oil and gas prices has fueled concerns about renewed inflationary pressures, prompting investors to dial back expectations for Fed rate cuts.

Markets are now pricing in the next reduction in September rather than July, though two 25bps cuts are still anticipated in 2026.



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Dollar Edges Down After Two-Day Surge
The dollar index dipped about 0.3% below 99 on Wednesday, after rallying 1.5% over the previous 2 sessions, as traders paused to weigh developments in the conflict with Iran, including a New York Times report that Iranian operatives had offered to discuss terms for ending the fighting, while oil and gas prices eased. Also, President Trump said Washington would insure and escort vessels transiting the Strait of Hormuz if necessary. While details of the plan remain unclear, the announcement helped ease some pressure in energy markets. Meanwhile, the Treasury Secretary said the global 15% tariff starts this week, adding that he expects the levies to revert to their previous levels within 5 months.The recent spike in oil and gas prices has fueled concerns about renewed inflationary pressures, prompting investors to dial back expectations for Fed rate cuts. Markets are now pricing in the next reduction in September rather than July, though two 25bps cuts are still anticipated in 2026.
2026-03-04
Dollar Firms Up on Inflation Worries
The dollar index held above 99 on Wednesday after a sharp two-day rally, as fears that a protracted Middle East conflict could sustain the rally in energy prices fanned inflationary concerns. Traders scaled back expectations for Federal Reserve rate cuts, now pricing in the next reduction in September instead of July, though two 25 basis point cuts are still expected this year. The dollar was also supported by safe-haven demand as the US-Israeli war on Iran entered its fifth day, with Israel striking a building where clerics were meeting to elect a new Supreme Leader on Tuesday. US President Donald Trump voiced concern that the attacks could bring a new Iranian leadership as troubling as the prior regime, underscoring the conflict’s uncertain trajectory. The dollar strengthened broadly, posting the largest gains so far this week versus the euro and antipodean currencies.
2026-03-04
Dollar Extends Gains
The dollar index strengthened nearly 1% to move above 99 on Tuesday, extending Monday’s 0.8% advance and reaching its highest level since mid-January. The gains came as escalating tensions in the Middle East and the ongoing conflict with Iran boosted safe-haven demand for the greenback. Investors are also viewing the US as a relative safe haven given its greater energy independence, further supporting the currency. Meanwhile, the surge in energy prices has reignited inflation concerns, prompting traders to scale back expectations for Federal Reserve rate cuts. Markets have now anticipate the Fed’s next rate reduction in September, from earlier projections of July, although two 25-basis-point cuts remain priced in for 2026. The dollar rose 1.3% against the Australian dollar, gained nearly 1% versus the euro, advanced 0.8% against the pound, and edged up 0.3% against the yen.
2026-03-03