The United States Dollar Index gains strength as the US and Iran reach a 60-day truce agreement, although President Trump has yet to give final approval.

• The US Dollar Index (DXY) strengthens to around 99.00 during Friday’s Asian session as investors monitor ongoing US-Iran negotiations. Vice President JD Vance stated that Washington and Tehran are “very close” to reaching a deal, though key issues remain unresolved.
• Meanwhile, the US core PCE inflation rate rose 3.3% year-over-year in April, matching market expectations and reinforcing the Federal Reserve’s cautious policy stance.

The US Dollar Index (DXY), which tracks the US Dollar (USD) against a basket of six major currencies, trades near the 99.00 level during Friday’s Asian session. The Greenback edges higher following reports that the United States and Iran have reached a preliminary agreement to extend their ceasefire, although US President Donald Trump has yet to formally approve the deal.

According to Bloomberg, Washington and Tehran have tentatively agreed to prolong the ceasefire by 60 days while continuing negotiations over Iran’s nuclear program. Optimism surrounding a potential resolution to the three-month conflict could, however, limit demand for the safe-haven US Dollar.

US Vice President JD Vance stated on Friday that several key issues still need to be resolved before a final agreement can be achieved. Speaking to the BBC, Vance said it remains uncertain “when or if” both sides will ultimately reach a formal deal.

On the economic front, data released by the US Bureau of Economic Analysis (BEA) on Thursday showed that the Personal Consumption Expenditures (PCE) Price Index rose 3.8% year-over-year in April, up from the previous 3.5% reading and in line with market forecasts.

Meanwhile, the core PCE Price Index, which excludes food and energy prices, increased 3.3% annually in April versus 3.2% previously, also matching expectations. On a monthly basis, headline PCE and core PCE advanced by 0.4% and 0.2%, respectively. The inflation data reinforced expectations that the Federal Reserve (Fed) may keep interest rates elevated for an extended period.

According to the CME FedWatch Tool, markets are currently pricing in a roughly 36.6% chance that the Fed will deliver a 25-basis-point rate hike before the end of the year.