Dollar Strengthens as Middle East Tensions and UK Transition Weigh

Crude prices experienced sharp volatility following the blockade announcement, though markets eventually cooled as both Washington and Tehran hinted at a potential return to diplomatic dialogue. This easing of rhetoric provided a temporary floor for energy costs, even as the prospect of U.S. involvement in the region remains a primary concern for traders.

In London, the pound faced mild downward pressure following the inauguration of Prime Minister Andy Burnham. Investors are maintaining a stance of cautious optimism regarding his economic agenda, waiting for concrete policy signals. Meanwhile, the Federal Reserve has entered a mandatory quiet period ahead of its next policy meeting. Market participants have largely priced out an immediate rate hike, though speculation persists that a September increase remains firmly on the table.