The dollar index (DXY00) today is up by +0.24%. Today's better-than-expected US economic news on Mar housing starts and Mar core capital goods new orders is supporting gains in the dollar. Also, today's +4% jump in crude oil prices increases inflation expectations, a hawkish factor for Fed policy, and a positive factor for the dollar. Movement in the dollar is limited ahead of today's FOMC meeting results, where the Fed is expected to keep interest rates unchanged.
Heightened US-Iran tensions are boosting demand for the dollar as a safe-haven. The US and Iran are locked in a battle for control of the Strait of Hormuz, with both sides blocking the waterway to gain leverage during an extended ceasefire. The Wall Street Journal reported that President Trump told his aides to prepare for an extended blockade and that it carries less of a risk for the US than resuming hostilities or walking away from the conflict without securing a deal that curbs Iran's nuclear activities.
