Dollar rises in choppy trading as oil swings cloud inflation outlook
By Aboki Forex —
The dollar rose in uneven trading on Tuesday, swinging between gains and losses after touching a two-month high earlier in the day. Volatile oil prices clouded the inflation outlook and left the currency searching for direction.
Oil prices pulled back from earlier highs after U.S. President Donald Trump told reporters at the United Nations that U.S. officials had held talks with the Iranian delegation.
Strait of Hormuz in focus
Crude had earlier fallen after Iran proposed reopening the Strait of Hormuz within seven days if the United States eases military pressure. Iran and the United States had also hinted at the possibility of reviving negotiations aimed at ending their conflict.
That early optimism faded after Trump told the United Nations General Assembly that he believed the United States would reach a deal with Iran. The comments pushed both oil prices and the dollar higher.
Inflation still the bogeyman
“Obviously, the big bogeyman for everybody is inflation, but it's all been about why is there so much inflation?” said Juan Perez, senior director of trading at Monex USA in Washington.
Perez said the prolonged Iranian conflict and its escalation have been major drivers of inflation concerns. That uncertainty, he added, was leaving the dollar without a clear direction.