Dollar Steadies as CPI Looms, Oil Rises on Hormuz Tensions

The US dollar held steady against major peers on Tuesday as investors positioned for the upcoming inflation data. The dollar index, which measures the currency against a basket of six major counterparts, remained near recent highs due to expectations of a patient Federal Reserve.

Economists polled by Reuters expect the Consumer Price Index (CPI) to rise 0.3% month-over-month in the latest reading, with core prices also forecast to increase 0.3%. A hotter-than-expected print could reinforce the case for the Fed to keep interest rates elevated for longer, supporting the dollar.

Oil prices extended gains after reports of increased military activity near the Strait of Hormuz, a critical chokepoint for global crude shipments. Brent crude futures rose 1.2% to $82.50 per barrel, while West Texas Intermediate (WTI) climbed 1.4% to $78.20.