The US Dollar Index (DXY) declined to 98.50 on Tuesday, retreating from its recent highs amid easing safe-haven demand following President Trump's remarks indicating the Iran conflict is nearing resolution. The index had surged last week amid geopolitical tensions, but Trump's comments that the situation is "under control" and the war is "almost over" reduced investor anxiety. This shift in sentiment led to profit-taking in the dollar, with traders rotating into riskier assets like equities and commodities. The dollar's pullback impacts global markets, particularly emerging economies reliant on dollar-denominated debt. A weaker dollar typically boosts non-US equities and commodities priced in USD. Traders are now monitoring whether the easing tension will sustain the dollar's decline or if other factors like the Fed's policy outlook will reassert influence. The move also highlights the sensitivity of the dollar to geopolitical risk perceptions. For Gulf investors, the dollar's retreat could affect returns on USD assets and hedging strategies. With oil prices stabilizing and regional geopolitical risks evolving, investors should watch for shifts in US-Iran dynamics and potential Fed rate decisions. The next key level for DXY is 98.00 support, with a break below this triggering further technical selling.

Read full article from source ↗