USD Steady as CPI Meets Expectations; Oil Surge Lifts Yields Amid Iran Tensions

The US dollar showed mixed performance on March 11 as February CPI data came in largely in line with expectations, failing to provide a clear directional catalyst. Despite the benign inflation print, Treasury yields climbed higher, driven primarily by surging oil prices that pushed above $90 per barrel amid escalating US-Iran tensions. The EU warned that the ongoing US-Iran conflict could push European inflation above 3%, adding further uncertainty to global FX markets. The US monthly budget deficit ballooned to -$307.5B versus an expected -$75.85B, raising fiscal concerns. Bitcoin continued to trade in a choppy range with a slight upside bias. Iran's president set maximalist conditions for ending hostilities, while reports emerged of Iranian threats to strike the US west coast, fueling risk aversion. Energy stocks surged while broader equities finished mixed. Traders should monitor geopolitical escalation risks closely, as further oil price spikes could strengthen commodity-linked currencies while pressuring risk-sensitive pairs against safe havens like the yen and Swiss franc.