Hawkish Fed Commentary Drives US Dollar Higher

Federal Reserve Governor Christopher Waller's comments have introduced the possibility of an interest rate hike if upcoming inflation data remains high, potentially putting a July rate increase in play. This hawkish stance boosted expectations for tighter monetary policy, causing the US Dollar Index (DXY) to regain upward momentum against a basket of currencies.

Precious Metals Plunge Amid Rate Hike Fears

Gold and silver prices fell sharply as the prospect of higher interest rates and a stronger US Dollar diminished the appeal of non-yielding assets. Gold crashed following the Fed official's remarks, while silver's downtrend accelerated as the Greenback strengthened broadly.

Middle East Tensions Boost Safe-Haven Dollar

Escalating tensions between the US and Iran, which have led to a reported 60% drop in ship traffic through the Strait of Hormuz, are increasing market uncertainty and bolstering the safe-haven US Dollar. Consequently, the dollar strengthened against several currencies, including the risk-sensitive Australian dollar and the Japanese Yen, while crude oil markets began to reprice the geopolitical risk.