The U.S. dollar index (DXY00) rose by 0.06% on Tuesday, August 11, 2026, as markets weighed geopolitical tensions in the Strait of Hormuz against shifting expectations for central bank rate decisions. The US Dollar Index currently trades at $99.88.

WTI crude oil prices rose more than 1% to a 1-week high on Tuesday, August 11, 2026, while Brent crude futures rose 1.81% to $89.25 per barrel in early trade. U.S. West Texas Intermediate futures were 1.78% higher at $83.58 in early trade. Oil prices are up by 5% as the U.S. and Iran did not reach any deal over the weekend.

Pakistan signaled that the U.S. and Iran were close to an arrangement that could reopen the Strait of Hormuz. Iranian Foreign Minister Abbas Araghchi said an agreement with Oman to establish a shipping route through the Strait of Hormuz was "very close." Secretary of State Marco Rubio met with Austrian Foreign Minister Beate Meinl-Reisinger in Washington and held a call with the Greek foreign minister, after which both European ministers spoke with Iranian Foreign Minister Abbas Araghchi.

Abbas Araghchi stated that reopening the Strait of Hormuz would require the U.S. to end its blockade of Iranian shipping, withdraw its forces from around Iran, remove sanctions, release frozen assets, and compensate Iran for damages caused by U.S. attacks. He demanded a permanent end to attacks on groups Iran backs in Lebanon, Iraq, Yemen, and Gaza. President Donald Trump suggested Tehran must pay the U.S. compensation for the war in response to Iranian demands for reparations.

President Trump said the U.S. was only "semi-negotiating" with Iran on the Strait of Hormuz. He said the U.S. blockade of Iran was deepening the country's financial woes. President Trump signaled on Sunday that he is prepared to let economic pressure on Iran build rather than launch additional military strikes. President Donald Trump stated that the U.S. now has control of the Strait of Hormuz.

Iran’s joint military command, Khatam al-Anbiya Central Headquarters, stated that no vessel could transit the Strait of Hormuz without Tehran’s permission. Another UAE tanker was targeted by an Iranian missile on Saturday while transiting the Strait of Hormuz. Houthi militants in Yemen claimed an attack on Saudi Arabia's Jazan refinery on Sunday.

Chicago Fed President Goolsbee stated that inflation is the biggest problem the economy faces. Cleveland Fed President Beth Hammack said she is not seeing a problem with the job market and that inflation is not coming down on its own. She said "now is the time" for action, as the current interest rate is not meaningfully restricting the economy. She said the Fed would probably need "some number" of rate hikes to bring down inflation.

Markets are discounting a 51% probability of a 25 basis point rate hike at the FOMC meeting on September 15-16. Markets are discounting an 89% chance of a 25 basis point ECB rate hike at its next policy meeting on September 10. Economists expect a 0.2% month-on-month increase in the core CPI for July 2026.

In June 2026, the Fed's preferred core inflation measure was reported at 3.3%. The Fed's preferred core inflation measure increased 2.8% from the previous year in June 2026. The U.S. Consumer Price Index (CPI-U, all items) was 333.918 in July 2026.

U.S. July existing home sales fell 1.7% month-over-month to 4.06 million. The yield on the 10-year Treasury note increased 3 basis points to 4.7334% in early trade on Tuesday, August 11, 2026. The yield on the 2-year Treasury note was up by more than 2 basis points at 4.2597% on Tuesday, August 11, 2026. The 30-year Treasury yield rose more than 3 basis points to 5.2790% on Tuesday, August 11, 2026.

EUR/USD fell by 0.03% on Tuesday, August 11, 2026. USD/JPY fell by 0.01% on Tuesday, August 11, 2026. Trading activity in the yen was below normal with markets in Japan closed on Tuesday for the Mountain Day holiday. GBP/USD climbed above the 1.3500 level on Tuesday, August 11, 2026.

October COMEX gold closed up $21.10 (+0.48%) on Tuesday, August 11, 2026. Gold climbed to a 2.25-month high on Tuesday, August 11, 2026. Gold climbed above the $4350 level on Tuesday, August 11, 2026.

September COMEX silver closed down $0.337 (-0.52%) on Tuesday, August 11, 2026. Silver settled above $65.00 on Tuesday, August 11, 2026. Long holdings in gold ETFs fell to a 10.25-month low on July 27, 2026. Bullion held in China's PBOC reserves rose by 640,000 ounces to 76.08 million troy ounces in July 2026. July 2026 marked the twenty-first consecutive month the PBOC boosted its gold reserves.

The S&P 500 Index was down 0.04% on Tuesday, August 11, 2026. The Dow Jones Industrial Average was down 0.14% on Tuesday, August 11, 2026. The Nasdaq 100 Index was down 0.15% on Tuesday, August 11, 2026.

Taiwan Semiconductor Manufacturing Co. reported that its July sales rose 45% year-over-year. JPMorgan Chase & Co. raised its year-end projection for the S&P 500 to 8,000 from 7,800. 85% of the 444 S&P 500 companies that have reported Q2 earnings beat estimates.

The Eurozone August Sentix investor confidence index rose 4.0 to a 6-month high of 0.9. Expectations for the Eurozone August Sentix investor confidence index were -0.5. The Japan July eco watchers outlook survey rose 0.1 to a 5-month high of 45.8.

Expectations for the Japan July eco watchers outlook survey were 46.1. Most economists say the UK economy grew by around 0.4% in Q2 2026.

The dollar index (DXY00) rose by 0.29% on Monday, August 10, 2026. WTI crude oil prices surged 5% on Monday, August 10, 2026. EUR/USD fell by 0.15% on Monday, August 10, 2026. USD/JPY rose more than 0.94% on Monday, August 10, 2026.

Why It Matters

The convergence of geopolitical friction in the Strait of Hormuz and divergent central bank signals created volatility across currency and commodity markets. With Iran’s military command asserting control over transit permissions and recent attacks on regional infrastructure, energy supplies face disruption risks that directly influence inflation metrics such as the July 2026 CPI-U of 333.918. Federal Reserve officials emphasized persistent inflation concerns, with markets pricing in a probability of rate hikes in September, while the European Central Bank faces even higher expectations for tightening.

These monetary policy shifts occur alongside mixed economic data, including a decline in U.S. existing home sales and strong corporate earnings reports from major S&P 500 constituents. The interplay between diplomatic negotiations, such as those involving Secretary of State Marco Rubio and Iranian Foreign Minister Abbas Araghchi, and military posturing determines the immediate trajectory for global trade routes and asset prices. Investors monitor these developments closely as they assess the balance between economic growth indicators and the potential for prolonged supply chain constraints.