Dollar Ticks Up as Gulf Tensions Escalate Amid Anticipated US Inflation Data
The US dollar rose on Wednesday as investors sought safe-haven assets due to escalating tensions in the Gulf region. The dollar index, which tracks its value against a basket of six currencies, gained 0.05% to 99.85.
Oil prices increased after reports of separate attacks on shipping by Iran-aligned Houthis and the US, with Tehran threatening to keep the Strait of Hormuz closed unless Washington accepts its conditions. This has led investors to buy the dollar as a safe-haven asset in times of uncertainty.
Economists expect upcoming US data to show inflation picked up last month after easing in June, which would likely boost expectations for a Federal Reserve interest rate hike. Fed Bank of Chicago President Austan Goolsbee said he was more concerned about too-high inflation than labor market weakness.