The dollar index dipped about 0.3% below 99 on Wednesday, after rallying 1.5% over the previous two sessions, as traders paused to weigh developments in the conflict with Iran, including a New York Times report that Iranian operatives had offered to discuss terms for ending the fighting, while oil and gas prices showed signs of easing. Also, US President Trump said Washington would insure and escort vessels transiting the Strait of Hormuz if necessary. While details of the plan remain unclear, the announcement helped ease some pressure in energy markets, at least temporarily. The recent spike in oil and gas prices has fueled concerns about renewed inflationary pressures, prompting investors to dial back expectations for Federal Reserve rate cuts. Markets are now pricing in the next reduction in September rather than July, though two 25-basis-point cuts are still anticipated before year-end.
