Dollar Gains on Fresh US-Iran Strikes

The dollar index climbed above 101 on Monday, rising for the second straight session as escalating tensions in the Middle East fueled safe-haven demand for the currency. The US and Iran exchanged fresh missile strikes over the weekend amid ongoing disputes over shipping through the Strait of Hormuz, pushing oil prices higher and reinforcing expectations of interest-rate hikes to contain inflation. Investors are also awaiting key US inflation data this week for further clues on the Federal Reserve’s policy outlook. Markets currently expect the Fed to deliver one rate increase before the end of the year. Minutes from the Fed’s June meeting, released last week, showed that a few policymakers saw a case for raising rates, though they ultimately supported keeping policy unchanged. Meanwhile, Fed Chair Kevin Warsh is scheduled to make his first appearance before the US Congress on Tuesday and Wednesday.

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