DXY Steadies Amid Ongoing Geopolitical Tensions and Interest Rate Hike

The US Dollar Index (DXY) stabilized after reaching its highest level since July 30, but trading remained subdued as it hovered just below the mid-100.00s.

The Federal Reserve's interest rate hike last week, which pointed to one additional increase this year, and officials' warnings about persistent inflation risks due to commodity price shocks, kept traders cautious.

Geopolitical tensions in the Middle East continued to drive safe-haven demand for the dollar, with Iran's Islamic Revolutionary Guard Corps warning of a potential escalation if the US takes further economic measures.

The Strait of Hormuz, which handles over 20 million barrels of oil per day, remains a key concern as any disruption could trigger sudden spikes in energy prices and dollar demand.