$US
Dollar Index advances to near 100.00 due to strengthening Fed hawkish stance
US Dollar Index gains on rising safe-haven demand amid escalating Middle East tensions.
Washington is considering a ground move to seize Iran’s Kharg Island, a crucial oil export hub.
Higher oil prices are driving inflation concerns and strengthening the Fed's hawkish stance.
The US Dollar Index (DXY), which measures the value of the $US Dollar (USD) against six major currencies, extends its gains for the second successive session and is trading around 99.80 during the early European hours on Monday.
The Greenback strengthens on heightened safe-haven demand as Middle East tensions intensify. US President Donald Trump has reportedly given Iran a 48-hour deadline to reopen the Strait of Hormuz or face possible strikes on its energy infrastructure. Reports also indicate Washington is weighing a ground operation to take control of Iran’s Kharg Island, a major oil export hub.
Iran’s Islamic Revolutionary Guard Corps (IRGC) warned it would shut the strait completely if the US acts, while Tehran threatened to target US and Israeli assets across the region, including energy, IT, and desalination facilities.
The US Dollar is further supported by rising oil prices, which are fueling inflation concerns and reinforcing the Federal Reserve’s (Fed) hawkish stance. Markets are increasingly pricing in the possibility of a Fed rate hike toward year-end.
At its March meeting, the Fed voted 11–1 to keep interest rates unchanged within the 3.50%–3.75% range, marking a second straight hold after a series of cuts in late 2025. Meanwhile, futures markets indicate an 85.5% probability that rates will remain unchanged at the April meeting, according to the CME FedWatch tool.