Due to the ongoing uncertainty surrounding the Israel-Iran conflict and the US assault on Iranian nuclear sites over the weekend, the dollar appreciated on Monday. The Dollar Index has increased 0.61% in daily trade to 99.31 by around 2.45 CEST. It failed to regain losses attributed to the Trump administration’s unpredictable policies, showing a 0.19% increase over the month but a nearly 9% down year-to-date.
While some Iranian authorities minimised the impact, US President Donald Trump said that the weekend attacks had caused “monumental damage.” The UN’s nuclear inspector could not instantly assess the full extent of the damage.
While Tehran pledged that it would “never surrender to bullying and oppression,” Israel carried on with its Monday strikes on Iran. A retaliatory closing of the Strait of Hormuz, a shipping channel that accounts for around 20% of world oil and gas flows, was threatened by several countries.
During this morning’s trading session, the dollar made the anticipated comeback. However, the euro was damaged by the US military display and the anxiety about rising oil costs, according to a report by ING economists.
Increased oil costs would probably cause inflation to rise and deter the US Federal Reserve from lowering interest rates anytime soon. While this would harm US consumers, it would also make the dollar more appealing to investors.
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