Dollar Steadies After US Strikes on Iran as Markets Await US Inflation Data

The US dollar remained relatively stable on Wednesday following American military strikes against Iran, triggered by claims that Tehran shot down a US Apache helicopter in the Strait of Hormuz. Despite the escalation, President Trump characterized the incident as minor and confirmed the pilot's safety, while Commonwealth Bank economist Harry Ottley maintained that the conflict remains on a de-escalatory trajectory. The dollar index edged up 0.01 percent to 100.02, with the euro declining 0.05 percent and sterling falling 0.04 percent. Investors are awaiting crucial US consumer price index data for May to assess whether the Federal Reserve might pursue rate hikes later in the year, particularly given strong recent job data. The Japanese yen weakened 0.03 percent to 160.38 per dollar, hovering near the 160 level considered a potential intervention threshold, while Japan's wholesale prices surged 6.3 percent year-over-year, exceeding expectations and reflecting Middle East conflict-related pressures. The European Central Bank's policy meeting on Thursday, where a 25-basis-point rate hike is widely anticipated, adds another layer to currency market dynamics.