Dollar Firms Amid Hormuz Tensions Ahead of Key Inflation Data
The US Dollar Index (DXY) held firm near the 99.60s on Tuesday, maintaining a safe-haven bid due to ongoing tensions around the Strait of Hormuz. The incident has kept geopolitical premium under the currency, with Iran's top negotiator reiterating that the waterway will remain closed until Washington meets the conditions of the expired interim deal. US President Donald Trump insisted in a social media post that the Strait is open and operating, but no talks with Tehran are scheduled.
The Dollar's strength weighed on major currencies, with most drifting lower against the Greenback. The EUR/USD traded within a narrow range around 1.1580 as the US Dollar kept its upper hand. The GBP/USD edged lower ahead of the UK Consumer Price Index (CPI) for July, which is expected to tick higher.
The USD/JPY firmed up due to the safe-haven bid favoring the Greenback over the Japanese Yen. Meanwhile, Gold retreated sharply, pulling back over 1% toward $4,350 as a firmer Dollar and profit-taking weighed on the metal.