The dollar index hovered just below 100 on Friday after gaining for three straight sessions, bolstered by mounting uncertainty surrounding the Middle East conflict and its implications for oil prices, inflation, and global growth.
According to recent reports, the Pentagon is considering deploying up to 10,000 additional ground troops to the region, aiming to provide the White House with greater leverage and flexibility in negotiations. At the same time, Trump has reportedly extended by 10 days a deadline for potential strikes on Iranian energy infrastructure, noting that Iran had allowed 10 oil tankers to transit the Strait of Hormuz this week as a “present” to the United States.
Conflict-related disruptions have driven energy prices higher, intensifying inflation concerns and reinforcing expectations of a more hawkish Federal Reserve. Interest rate futures now imply nearly a 50% probability of a Fed rate hike by December, a marked shift from earlier pricing that anticipated two rate cuts this year.