The dollar index climbed as much as 0.5% to 98 on Monday before paring gains, as investors sought safe-haven assets amid the escalating war in the Middle East. The US and Israel carried out military strikes on Iran over the weekend that resulted in the death of Iran’s Supreme Leader, Ayatollah Ali Khamenei, and the effective closure of the Strait of Hormuz. Tehran retaliated by targeting US assets across the region, raising concerns of a broader conflict. Meanwhile, data on Friday showed US producer prices rose more than expected in January, indicating that companies are passing tariff costs to consumers and complicating the path for Federal Reserve rate cuts. Still, markets are pricing in two 25-basis-point rate cuts this year amid speculation that recent market turmoil could prompt the central bank to ease monetary settings.