Dollar Drifts Higher As Gulf Tensions Bolster Safe-Haven Bid

The dollar drifted higher on Monday as investors tempered their expectations for deep U.S. interest rate cuts this month and intensifying Middle East tensions supported safe-haven assets.

While currency-market focus will be mainly on global central bank decisions scheduled for the next two weeks, traders are also observing for developments in U.S.-China trade negotiations and Wall Street earnings.

Geopolitical fears were dominated by confrontation in the gulf region escalating, with footage showing the Iranian military defying a British warship when it seized a tanker in the Strait of Hormuz.