Dollar Stalls Despite Iran Escalation Ahead of Critical CPI and Fed Warsh Testimony

Escalating conflict in the Middle East would normally be enough to send the Dollar sharply higher. Instead, markets hesitated. Brent crude climbed above $79 after the weekend’s dramatic expansion of the US-Iran conflict, but stopped short of the $80 threshold that could trigger a broader inflation repricing. Besides, rather than rebuilding aggressive Dollar longs, traders opted to wait for Tuesday’s US June CPI report and Kevin Warsh’s first congressional testimony as Federal Reserve Chair, two events that could prove far more consequential for the policy outlook than the latest geopolitical headlines