Forex News: U.S. Dollar Inches Higher Amid Rising Expectations Of

U.S. Dollar Inches Higher Amid Rising Expectations Of Tighter Fed Monetary Policy

(RTTNews) - The U.S. Dollar value moves higher as the Strait of Hormuz remains closed with the U.S. and Iran unrelenting in their demands from each other leading to heightened uncertainty over its reopening. The consequent surge in crude oil prices renewed inflationary concerns and triggered expectations of a higher interest rate regime in the U.S. in the near-term.

Today, the U.S. Dollar Index DXY which measures the Greenback against a basket of other major currencies was last seen trading at 99.81, up by 0.28 (or 0.28%).

While against the Euro, the USD was trading at 1.154, up by 0.10%, against the GBP, the USD was trading at 1.350, down by 0.17%.

Against the USD, the Japanese Yen was trading at 159.307, down by 0.98%, the Swiss Franc was trading at 0.810, down by 0.35%; and the Canadian Dollar was trading at 1.394, down by 0.03%.

Against one unit of Australian Dollar, the USD was trading at 0.705, up by 0.14%.

The Middle East conflict between the U.S. and Iran is continuing to impact crude oil prices as the Strait of Hormuz remains shut.

Iran announced that it was on the verge of sealing an agreement with Oman for creating new shipping lanes between the two nations across the Strait of Hormuz. However, Iran insisted that prior to the opening, the U.S. must meet the conditions laid out by Iran including lifting off of the U.S. sanctions, an end to frequent military attacks, and adequate compensation for damages suffered by Iran due to war.

On Iran's demand for compensation for war-damages, through Truth Social, Trump called out that it was not mentioned in any of the previous U.S.-Iran talks. Making a counter demand, Trump sought compensation from Iran for human lives lost due to Iranian attacks and killings including the deaths within Iran during the civil uprising months before.

Experts are now concerned that the Strait of Hormuz closure could go on for an indefinite period. As a result, crude oil supply-related concerns have renewed.

Last Thursday, the data released by the U.S. Labor Department showed that the number of people claiming unemployment benefits inched higher by 1,000 to 199,000 over the final week of July, slightly under market expectations of 202,000. The continuing jobless claims increased to 1,801,000 for the week ending July 25 from 1,777,000 of the previous week.

Of note, the jobless claims have been below 200,000 for three consecutive weeks, the first time in nearly 57 years.

Friday's nonfarm payrolls data released by the U.S. Bureau of Labor Statistics revealed that the economy unexpectedly lost 23,000 jobs in July, compared to forecasts of an 80,000 increase. The numbers for May and June were also revised lower, with the combined revisions showing that employment was 103,000 lower than previously reported.

Focus of traders are currently shifting to the upcoming Consumer Price Index to assess the possibility of U.S. interest-rate hikes.

Currently, investors are betting on a 51.70% chance of a quarter-basis-point interest rate-hike in the upcoming meeting of the U.S. Federal Reserve on September 15-16 while the odds on rates being held at the current level stand at 48.30%, according to the CME Group's FedWatch Tool.

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