Last Updated on July 7, 2026 by Deon
Introduction The US Dollar Index moved up on Tuesday. This happened because investors wanted a place to put their money. There are problems near the Strait of Hormuz a waterway that lots of the worlds oil goes through.
When there are problems like this investors usually take their money out of things and put it into safer things like the US Dollar and US Treasury securities. The latest news has made this happen again. The US Dollar is getting stronger compared to other major currencies.
Why the US Dollar Is Getting Stronger
The Dollar Index went up because of the situation. There were reports of attacks near the Strait of Hormuz. This has made people worried about the worlds energy supply and shipping routes. A lot of the worlds oil goes through this area. If there’s a problem it could make energy prices go up and make inflation go up too.
As investors react to these risks they’re wanting assets. This is helping the US Dollar. At the time traders are being careful because they’re waiting to hear more about what the Federal Reserve will do with interest rates.
Markets Are Being Careful
The uncertain situation is affecting lots of markets.
Some of the things that are happening include:
The US Dollar is getting stronger
US Treasury yields are going up
Oil prices are going up
Stock markets are not doing well
People are not wanting to take risks with currencies that are considered
Currencies that are closely tied to how well the world economy is doing, like the Australian Dollar and New Zealand Dollar are struggling. Investors are putting their money into things.
The Euro and British Pound have stayed pretty stable.. They’re still feeling pressure from the stronger US Dollar.
Federal Reserve Is Important
Even though the uncertain situation is making investors nervous they’re also paying attention to the Federal Reserve.
Recent economic data has made people think that the Federal Reserve won’t raise interest rates much as they thought.. Policymakers are still watching inflation risks. They’re especially watching to see if higher oil prices will make consumer prices go up.
The next meeting minutes from the Federal Reserve could give us information. We might find out how they view inflation, economic growth and what they’ll do with policy.
If the Federal Reserve stays firm the US Dollar might get even stronger.
What Happens with Higher Oil Prices
One thing that’s happening because of the problems near the Strait of Hormuz is that oil prices are going up.
Higher energy prices can:
Make transportation costs go up
Make inflation go up
Slow down growth
Delay what the central bank does with interest rates
This usually helps the US Dollar. Investors think that the central bank will keep interest rates higher for longer. They also want assets.
Technical View of the US Dollar Index
From a standpoint the Dollar Index is doing better.
Some good signs for the Dollar are:
It has gone back above 101
People still want to buy safe-haven assets
Momentum indicators are positive
Some levels to watch are:
Resistance: 101.50, 102.00 102.50
Support: 100.60, 100.20 99.80
long as the index stays above the support levels buyers are likely to be in control. If it goes above 101.50 it might keep going to 102.
What to Watch Next
There are a things that could affect what the Dollar does next:
Federal Reserve meeting minutes
News from the Middle East
Inflation expectations
US economic data
