Here is what you need to know on Tuesday, July 14:

The US Dollar Index (DXY) surges toward 101.30, gaining around 0.3% as escalating tensions between the United States (US) and Iran boost safe-haven demand and drive energy prices sharply higher. US President Donald Trump said the Strait of Hormuz would remain open “with or without Iran,” declared the US the “Guardian of the Hormuz Strait” and announced a blockade targeting Iranian ships and customers.

Iran rejected Washington’s involvement and warned that any unauthorized US attempt to transit the Strait would face strong resistance. Tehran also said cooperation between regional countries and the US could be considered an act of war.

Attention now turns to the US Consumer Price Index (CPI) report. Headline inflation is expected to ease to 3.8% YoY in June from 4.2%, while the monthly reading is forecast to decline 0.1% after rising 0.5%. Core CPI is projected to remain unchanged at 2.9% YoY and 0.2% MoM. Fed Chair Kevin Warsh will also testify later in the session, followed by several Federal Reserve (Fed) officials.

EUR/USD falls toward 1.1380, losing 0.3% as broad US Dollar strength outweighs support for the Euro. Higher Oil prices could also complicate the Eurozone’s inflation and growth outlook due to the region’s reliance on imported energy. European Central Bank (ECB) President Christine Lagarde is scheduled to speak, although US inflation data will likely remain the pair’s main driver.

GBP/USD declines near 1.3350, down around 0.4%, as investors move toward the Greenback amid geopolitical uncertainty. With no major United Kingdom data scheduled, Sterling is likely to follow developments surrounding the Strait of Hormuz, the US CPI release, and Fed commentary.

USD/JPY advances toward 162.40, gaining around 0.5% as the Japanese Yen struggles despite the risk-off environment. The sharp increase in Oil prices weighs on Japan’s economic outlook due to the country’s dependence on imported energy. The pair’s rise near multi-decade highs could also increase speculation about possible intervention by Japanese authorities.

AUD/USD falls below 0.6920, losing around 0.5% as weaker risk appetite weighs on the Australian Dollar. China’s June exports are expected to rise 18.2% YoY, easing from 19.4%, while imports are forecast to increase 24% YoY, down from 27.4%.

USD/CAD remains broadly neutral near 1.4150. The Canadian Dollar receives support from the surge in Crude Oil prices, but the stronger US Dollar prevents the pair from moving significantly lower.

West Texas Intermediate (WTI) Oil trades sharply higher near $78.00 per barrel, gaining around 9% and reaching a one-month high. Concerns about possible disruptions to shipping through the Strait of Hormuz have increased fears of tighter global energy supplies.

Gold falls below the psychological $4,000 level, losing around 3%. The precious metal has failed to benefit from geopolitical uncertainty as the surging US Dollar and concerns that higher energy prices could keep interest rates elevated weigh on demand.