The dollar index (DXY00) on Tuesday fell by -0.11%. The dollar was under pressure on Tuesday on concerns that the lingering Iran war could lead to a spike in energy prices that derail the economy. Losses in the dollar were limited after US Feb capital goods new orders nondefense ex-aircraft and parts rose more than expected. Also, Tuesday's stock weakness boosted some liquidity demand for the dollar.
The markets are watching for any sign of a breakthrough amid a flurry of diplomacy before President Trump's 8 pm EST deadline Tuesday night. Mr. Trump insists any deal must ensure uninterrupted transit through the Strait of Hormuz or he will destroy Iran's bridges and power plants if no accord is reached. Axios reported that the US conducted strikes on military targets on Kharg Island on Tuesday, and Israel told Iranians to refrain from using their country's railway network. Also, Iran pressed on with attacks across the Persian Gulf, dimming chances for peace.
