Dollar Stabilizes Amid Ongoing Trade Tensions and Geopolitical Uncertainty

The US Dollar (USD) has stabilized after Monday's moderate recovery gains as market optimism about a diplomatic resolution to the conflict in the Middle East fades. The USD Index staged a rebound on Monday, ending marginally higher after opening with a bearish gap and touching its lowest level since mid-June below 99.50.

The US economic calendar will feature Goods Trade Balance, JOLTS Job Openings, and Factory Orders data for June from the United States (US) in the second half of the day. The dollar's stability comes as market sentiment remains uncertain due to ongoing trade tensions.

Crude oil prices rebounded early Tuesday after falling over 7% on Monday, with the barrel of West Texas Intermediate (WTI) trading near $79.50, rising about 1% on the day. Analysts at Commerzbank note that the recent leg lower in crude was driven by a sudden shift in geopolitical expectations.