THE United States launched multiple strikes against Iran this week, reportedly hitting an oil tanker near the country's main oil export terminal for the first time since reimposing a blockade on Iranian ports.
US President Donald Trump also warned that Washington could target Iran's critical infrastructure next week unless diplomatic efforts lead to a breakthrough.
Meanwhile, Tehran reportedly instructed Yemen's Houthi rebels to close the Bab el-Mandeb Strait —a strategic shipping lane for Saudi Arabian crude exports via the Red Sea—if Iran's power infrastructure comes under attack.
Shipping traffic through the Strait of Hormuz has also declined sharply following the latest escalation, although some vessels continue to transit the vital waterway.
The heightened geopolitical risks have reinforced concerns over potential disruptions to global energy supplies, supporting crude prices despite broader market uncertainty.
US Dollar Weakens on Softer Inflation Outlook
Meanwhile, the US Dollar Index (DXY) steadied around 100.7 on Friday but remained on track for a weekly decline after softer-than-expected US inflation data prompted investors to scale back expectations of near-term Federal Reserve interest rate hikes.
However, the escalating conflict between the United States and Iran continued to stoke concerns that higher energy prices could reignite inflationary pressures.
Economic data released earlier this week showed that US consumer inflation rose less than expected in June, while producer prices unexpectedly declined, reinforcing expectations that underlying price pressures remain contained.
Retail sales increased broadly in line with forecasts, with lower petrol prices weighing on receipts at fuel stations, while spending at motor vehicle dealerships and online retailers remained resilient.
Separately, initial jobless claims fell to 208,000, the lowest level in two months, underscoring continued strength in the US labour market.
Financial markets have now largely ruled out a Federal Reserve interest rate increase at this month's policy meeting, although investors remain divided over the likelihood of a rate hike in September. - July 17, 2026
