FX.co ★ Dollar Holds Gains Amid US-Iran Impasse

The dollar index held above 99 on Tuesday after gaining in the previous session, as stalled peace talks between the US and Iran supported safe-haven demand and kept inflation risks and interest rate expectations in focus. On Monday, Iranian media reported that Tehran had cut off communications with Washington in response to Israeli strikes in Lebanon. At the same time, President Donald Trump said discussions were still underway and indicated that a memorandum of understanding with Iran to reopen the Strait of Hormuz could be reached within the next week. Even so, accelerating, energy-driven inflation has prompted markets to price in the possibility of a Federal Reserve rate hike before year-end. Investors are now looking ahead to Tuesday’s JOLTS job openings data, followed by Friday’s closely watched US monthly employment report, for further signals on the Fed’s policy trajectory.