Dollar Rises on Gulf Tensions, US Inflation Data in Focus

The US dollar rose on Wednesday due to increased tensions in the Gulf region, with investors seeking safe-haven assets. The renewed conflict has raised concerns about oil prices and the economic impact of an energy shock.

Oil prices edged up after separate attacks on shipping by Iran-aligned Houthis were reported, with Tehran stating that the Strait of Hormuz would remain closed unless Washington accepts its conditions. This led to a surge in demand for the dollar as investors sought to mitigate potential losses from higher oil prices.

Austan Goolsbee, President of the Federal Reserve Bank of Chicago, said he was more concerned about inflation than labor market weakness. Economists expect US inflation data due later in the session to show an increase last month after easing in June.