US Dollar Index Tests 3-Year Low

The US dollar index fell past 97.9 on Tuesday, testing the lowest in over three years as the continued flow of oil in the Middle East softened concerns of low inflation and supported bets of multiple Fed cuts this year.

Israel and Iran reportedly launched new strikes shortly after agreeing on a ceasefire on Tuesday, but refrained from pledging any retaliation.

This sustained the de-escalatory momentum after the seemingly controlled strikes between Iran and US forces the prior day, driving oil price to plunge as tankers continued to navigate through the Strait of Hormuz.

The improved inflation outlook supported the outlook of two cuts by the this year.

Elsewhere, Fed Chair Powell noted that pro-inflationary concerns from tariffs were partly responsible for the Fed refraining from cutting rates last meetings, backing bets of cuts should tariffs be tempered by President Trump's July 9th deadline.