US Dollar Gains Safe-Haven Premium on Hormuz Disruption as Softer July Data Curb Fed Hike Bets

3 articles · Updated · Yahoo Finance · Aug 14

Strait of Hormuz shipping curbs have left the dollar pulled between a war-driven safe-haven bid and fading support from US rate expectations, Rabobank said.
Higher oil prices are no longer a clear drag on the greenback because the US is now a major energy exporter, while energy-importing economies such as the eurozone face a bigger inflation-and-growth hit.
Short-dollar positioning at the start of the Iran war also helped fuel the currency's initial rally as investors rushed to unwind bearish bets.
July payrolls, CPI and PPI data then softened the other side of the dollar's support, prompting investors to scale back expectations for further Federal Reserve rate hikes.
Rabobank said the dollar should keep a safe-haven premium for as long as Hormuz shipping remains constrained, even as easier Fed expectations limit upside.

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