United States Dollar Index holds ground near 101.00 amid rising safe-haven demand

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is remaining in the positive territory and trading around 101.00 during the Asian session on Tuesday.

The Greenback receives support from rising safe-haven demand amid ongoing hostilities between the United States (US) US and Iran, which drove oil prices higher, reviving concerns about inflation and interest rate hikes.

Market expectations for a September Fed rate hike have ticked up to around 55%, compared to 51% yesterday. In the meantime, Federal Reserve officials have entered their traditional blackout period ahead of next week's FOMC meeting, where policymakers are widely anticipated to hold the federal funds rate steady.

US attacks on Iran continued for a tenth straight day. The ongoing campaign has coincided with continued retaliatory strikes from Tehran against neighboring countries, further escalating instability across the region.

Geopolitical friction escalated after President Donald Trump warned that Iran would be held directly accountable for the deaths of three U.S. service members. Adding to the market's anxiety, Iran-backed Houthi militants announced a maritime embargo against Saudi Arabia, threatening critical energy shipments moving through the Red Sea.