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BENGALURU/HONG KONG, July 21 (Reuters) - The U.S.
dollar held steady on Tuesday as markets balanced signs of escalating tensions in the Middle East against lingering optimism from softer inflation data last week.
dollar index, which measures the currency against a basket of six peers, was largely unchanged at 100.97 after hitting its highest since July 15 in the previous session, while the euro was marginally higher at $1.1421.
Lack of clarity on where the U.S.-Iran conflict is headed has left the dollar in limbo as markets lack conviction to place significant bets.
military has struck Iran for ten straight nights, reigniting tensions and prompting investors to dial back hopes that the conflict would end soon.
That kind of escalation typically drives flows into safe-havens such as the dollar.
At the same time, efforts to find a diplomatic solution remain active.
A senior Iranian official told Reuters on Monday that Tehran had received a proposal from mediators for a 10-day ceasefire.
A murky inflation outlook has added uncertainty to the markets.
inflation data released last week has already taken some wind out of the dollar by curbing bets on further interest-rate hikes.
We expect the dollar to remain firm over the next few months until the inflation picture becomes clearer," said Jimmy Jean, chief economist and strategist at Desjardins.
Traders are pricing in a 63.1% chance of a rate hike at the Federal Reserve's September meeting, compared with 90% from before the latest inflation print was released, according to data compiled by LSEG.
| Product | Price | Change |
|---|---|---|
| Brent Crude | $102.14/bbl | +0.34% |
| WTI Crude | $96.90/bbl | +0.21% |
| EN590 Diesel | $846/MT | +0.18% |
| Jet Fuel A-1 | $1090/MT | +0.55% |
| Mazut M100 | $450/MT | -0.15% |
| Bitumen 60/70 | $470/MT | +0.08% |
| Sulphur Gran 99.5% | $470/MT | -0.44% |
| Urea 46% Gran | $650/MT | +1.12% |
| NPK 16-16-16 | $460/MT | -0.28% |
| Nat Gas TTF | $15.42/MMBtu | +0.92% |
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