Dollar Volatility Intensifies Amid Iran Tensions and Rate Hike Concerns

The US dollar was volatile on Tuesday as investors weighed the impact of another decline in oil prices against the possibility of more rate hikes from the Federal Reserve.

Oil prices fell by over 2% to a two-week low after Iran proposed reopening the Strait of Hormuz within seven days if the US eases military pressure.

This move was seen as a potential de-escalation of tensions between the US and Iran, which had previously driven up oil prices and fueled inflation worries.

As a result, investors were torn between their concerns about inflation and the prospect of further rate hikes from the Fed.

Federal Reserve Bank of Boston President Susan Collins wrote on LinkedIn that she supported last week's interest rate increase amid risks that future inflation will be above its 2% target.