The dollar index remained below 99 on Tuesday after a sharp intraday drop in the previous session, as hopes for a swift end to the Iran war reduced safe-haven demand for the currency. President Donald Trump said the US military operation in Iran is nearing its conclusion and running well ahead of the initial four- to five-week estimated timeframe. He also indicated plans to waive oil-related sanctions and have the US Navy escort tankers through the Strait of Hormuz to help keep oil prices in check. The dollar had previously rallied on safe-haven buying as the Middle East conflict and surging oil prices raised fears of prolonged economic disruption and resurgent inflation. Looking ahead, investors await the February CPI report on Wednesday and January’s PCE price index on Friday for further clues on inflation trends, though neither is expected to fully reflect the impact of the Iran war.
