Oil Prices Soar as US-Iran Conflict Escalates

The US Dollar Index climbed to its highest level in over two weeks at 99.75 as markets reacted to the escalating tensions between the US and Iran. The move higher in the dollar weighed on gold, which fell more than 2.3% on Tuesday and remained under pressure around $4,310. The precious metal had touched a low of $4,282, its lowest level since August 7.

The Middle East conflict has sent oil prices soaring, with Brent crude rising back above $95 per barrel for the first time in over a month. WTI crude extended gains for a third straight day and briefly traded in the mid-$90s before easing back to around $89.10. The US energy secretary noted that 17 million barrels of oil moved through the Strait of Hormuz on Monday, highlighting the importance of this critical shipping route.

The Reserve Bank of New Zealand raised its Official Cash Rate by 25 basis points to 2.75%, matching expectations. However, the NZD/USD fell sharply as investors focused on the central bank's cautious guidance. The RBNZ stated that a gradual removal of monetary stimulus was necessary to bring inflation back towards the 2% target midpoint while continuing to support growth and employment.