Investors are also concerned about the ongoing war in the Middle East, particularly the escalating conflict between Iran and Israel, which could impact U.S. security.

If geopolitical tensions intensify, it could lead to a downturn in stock markets and potentially strengthen the U.S. dollar once again, given its status as a safe-haven currency.

Additionally, the U.S. Bureau of Labor Statistics is set to release the Consumer Price Index (CPI) data for July on Wednesday, which will have a direct impact on currency values and future interest rate cut expectations.

Source: Fxstreet