Dollar Holds Firm Amid US-Iran Conflict

2026-07-21 01:15 By Jam Kaimo Samonte 1 min. read

The dollar index traded near 101 on Tuesday after rising for three straight sessions, as ongoing hostilities between the US and Iran drove oil prices higher, reviving concerns about inflation and interest rate hikes.

US attacks on Iran continued for a tenth straight day, with President Donald Trump warning that Tehran would be held responsible for the deaths of three US service members.

Iran-backed Houthi militants also announced a maritime embargo against Saudi Arabia, raising concerns over energy shipments through the Red Sea.

Meanwhile, Iran said mediators had presented proposals to ease tensions with the US after several days of hostilities, while reports pointed to a possible 10-day ceasefire.

Markets now price in about a 55% chance of a Fed rate hike in September, up from 51% a day earlier.

Meanwhile, Fed officials have entered the blackout period ahead of next week's FOMC meeting, where policymakers are widely expected to keep the federal funds rate unchanged.



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Dollar Holds Firm Amid US-Iran Conflict
The dollar index traded near 101 on Tuesday after rising for three straight sessions, as ongoing hostilities between the US and Iran drove oil prices higher, reviving concerns about inflation and interest rate hikes. US attacks on Iran continued for a tenth straight day, with President Donald Trump warning that Tehran would be held responsible for the deaths of three US service members. Iran-backed Houthi militants also announced a maritime embargo against Saudi Arabia, raising concerns over energy shipments through the Red Sea. Meanwhile, Iran said mediators had presented proposals to ease tensions with the US after several days of hostilities, while reports pointed to a possible 10-day ceasefire. Markets now price in about a 55% chance of a Fed rate hike in September, up from 51% a day earlier. Meanwhile, Fed officials have entered the blackout period ahead of next week's FOMC meeting, where policymakers are widely expected to keep the federal funds rate unchanged.
2026-07-21
Dollar Steady on Monday
The dollar index hovered around 101 on Monday, as investors continued to assess developments in the Middle East and their implications for the economic and monetary policy outlook. Tensions between the US and Iran escalated over the weekend, sending oil prices to six-week highs before they pared most of their gains following comments from Iran's foreign ministry indicating that negotiations with the US could continue if the country's national interests are respected. Last week, both CPI and PPI reports came in softer than expected, but the recent surge in oil prices has raised concerns that the disinflation trend could stall. Markets continue to price in one Fed rate hike this year, with the probability of a September move remaining above 60%. Meanwhile, Fed officials have entered the blackout period ahead of next week's FOMC meeting, where policymakers are widely expected to leave the federal funds rate unchanged.
2026-07-20
Dollar Holds Gains as US-Iran Conflict Escalates
The dollar index traded near 101 on Monday after rising for two straight sessions, supported by escalating tensions in the Middle East that lifted oil prices and fueled concerns over inflation and the prospect of higher interest rates. The US military said it carried out fresh airstrikes against Iran on Sunday following the deaths of three American service members, while Tehran declared that its ceasefire with the US had effectively collapsed and said it intercepted four vessels transiting the Strait of Hormuz over the weekend. Meanwhile, Cleveland Fed President Beth Hammack on Friday joined a growing chorus of Fed officials warning about persistent inflation. Markets are now pricing in around a 53% chance of a Fed rate hike in September, up from 47% a day earlier, though the central bank is still widely expected to keep interest rates unchanged at this month's meeting.
2026-07-20