Dollar strengthens… Middle East tensions fuel inflation worries

JH Kim

Summary

It said that the stronger dollar and safe-haven demand are expanding amid military clashes in the Middle East and heightened uncertainty over energy supplies.
According to CME Group’s FedWatch, the probability of at least two rate cuts this year by the U.S. Federal Reserve was 36%, up from 22% last week.
It said the Wall Street Journal Dollar Index (WSJ Dollar Index) rose 0.3%, and the dollar climbed 0.3% against the euro and 0.4% against the yen, showing strength against major currencies.

Forecast Trend Report by Period

The dollar is strengthening as military clashes in the Middle East heighten concerns over energy supply disruptions.

On the 5th (local time), Walter Bloomberg reported that escalating tensions in the Middle East are amplifying inflation concerns, driving safe-haven demand into the dollar. Energy supply anxiety has also intensified as fuel supply disruptions forced some aluminum plants in parts of the Middle East to halt production.

According to CME Group’s FedWatch, the probability that the U.S. Federal Reserve will cut rates at least twice this year was 36%, up from 22% last week.

The Wall Street Journal Dollar Index (WSJ Dollar Index) rose 0.3%. The dollar gained 0.3% against the euro and 0.4% against the yen, showing strength against major currencies.