FX.co ★ Dollar Rises on Fragile US-Iran Ceasefire

The dollar index climbed back above 99 on Thursday, paring losses from the previous session as a fragile ceasefire between the US and Iran kept risk sentiment subdued. Iranian media reported that oil tanker traffic through the Strait of Hormuz remained halted following new Israeli strikes on Lebanon, while a senior Iranian official said three elements of the ceasefire proposal had already been violated. On Wednesday, the dollar had fallen sharply after Washington and Tehran agreed to a two-week ceasefire, triggering a sudden drop in oil prices and easing inflation fears. Meanwhile, minutes from the Federal Reserve’s latest policy meeting showed a growing number of officials saw a further rate hike as potentially necessary to curb inflation, even as many policymakers still anticipated that the next move could be a cut. Investors now look to February personal spending and the PCE deflator on Thursday, followed by Friday’s CPI report, for additional direction.