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ING analyst Francesco Pesole highlights that the US Dollar Index hovers near 99.0, with potential downward pressure if a lasting Middle East peace agreement is reached and Strait of Hormuz oil flows normalize. The dollar's performance remains tied to inflation expectations and geopolitical risks, particularly in energy corridors critical to global trade. A resolution in the Middle East could reduce energy price volatility and weaken the dollar's safe-haven appeal, while persistent inflation risks could support its strength. Traders should monitor developments in peace negotiations and U.S. inflation data for directional cues. Central banks' response to geopolitical stability and inflation trends will shape the dollar's trajectory in the coming months.
