DXY Bounces Back Above 100.00 Amid Escalating US-Iran Tensions

The US Dollar Index (DXY) has bounced back above 100.00 after hitting its lowest level since June 17, snapping a three-day losing streak.

This rebound is largely driven by escalating tensions between the US and Iran, which have increased geopolitical risks and kept inflationary pressures on the table.

While signs of cooling US inflation and a decline in the Personal Consumption Expenditures (PCE) Price Index to 0.1% in June may have dampened expectations for an immediate interest rate hike by the Federal Reserve, these concerns are being offset by the ongoing crisis.

The Iranian government has rejected Oman's plan for joint management of the Strait of Hormuz, and Saudi Arabia is building a coalition to protect key shipping routes from attacks by Houthi militias in Yemen.