Dollar Index Gains Amid Inflation Concerns

The US dollar index (DXY00) is up by +0.05% today after WTI crude oil prices rose more than +2% to a 1-week high, which raises inflation expectations and may persuade the Fed to tighten monetary policy.

However, the dollar fell back from its best level as crude prices erased most of their overnight gains when Pakistan signaled the US and Iran were close to an arrangement that could reopen the Strait of Hormuz.

The risk of a renewed flare-up across the Middle East remains high, which is providing safe-haven demand for the dollar.