US Dollar Index Declines Amid Easing Safe-Haven Demand

The US Dollar Index (DXY) has declined for the second consecutive day, trading at around 99.90 during the Asian session on Wednesday.

The drop in the DXY is attributed to a decrease in safe-haven demand, which is being driven by growing diplomatic momentum surrounding a potential agreement to reopen the Strait of Hormuz.

Qatari officials announced an interim proposal on Tuesday, with both Washington and Tehran signaling tangible progress toward restoring access to the critical maritime transit route.

The US Dollar may find minor support from a recovery in the 10-year US Treasury yield, which dipped towards 4.61% on Tuesday due to falling energy prices.

Fed's Schmid emphasized that current policy is 'not tight' and that inflation remains 'too high' and 'worrisome', with AI-related investment being a fresh driver of inflation risks.