FX.co ★ Dollar Steadies After Two-Day Surge

The dollar index was little changed just below 99 on Wednesday, after jumping 1.5% over the previous two sessions, as traders paused to assess developments in the Iran conflict and a slight pullback in the recent surge in energy prices. While tensions have not eased, US President Trump said Washington would, if necessary, insure and escort vessels transiting the Strait of Hormuz. Although the details of this plan remain unclear, the announcement helped temporarily relieve some pressure in energy markets. The recent spike in oil and gas prices has heightened concerns about a resurgence in inflationary pressures, leading investors to scale back expectations for Federal Reserve rate cuts. Markets now see the next cut coming in September rather than July, though two 25-basis-point reductions are still expected before year-end.