Dollar Holds Firm Ahead of U.S. CPI as Oil Surge Supports Safe-Haven Demand

The U.S. dollar index held near 99.88 on August 12, while USD/JPY hovered around 159.4 as traders awaited U.S. CPI for clues on the Fed’s September policy path. At the same time, renewed Strait of Hormuz tensions pushed Brent crude toward $90, raising inflation risks.

For traders, CPI is the key catalyst: a hotter reading could strengthen the dollar and lift yields, while softer inflation may revive easing expectations and pressure the greenback. Higher oil prices could add another layer of inflation risk.