Dollar Tumbles Amid Strait of Hormuz Tensions

The US Dollar Index (DXY) is trading near 99.50, a session low just above 99.25 and below August's range.

This comes as tensions escalate in the Strait of Hormuz with a 60-day framework meant to end the war expiring without a replacement.

A senior Iranian official told Reuters that the country may shift from a defensive policy to an offensive one if diplomacy fails, leading to increased uncertainty and volatility in the markets.

Despite this, haven assets such as Gold are being bid, with the Euro trading at a two-month high and the Pound near three-month peaks.

The Dollar had carried a hike premium since the July 29 meeting, but a soft Consumer Price Index (CPI) print, Producer Price Index (PPI) print, and 0.6% contraction in July retail sales took that premium apart inside four sessions.