The US Dollar Index remains under pressure after retreating from Wednesday’s 11-week peak of 100.57. The Greenback weakened as safe-haven demand eased following a preliminary US-Iran agreement aimed at ending the conflict. However, the Dollar could find support, as half of Federal Open Market Committee (FOMC) members still anticipate at least one interest-rate hike this year.
The US Dollar Index (DXY), which tracks the US Dollar’s performance against a basket of six major currencies, eased from Wednesday’s 11-week high of 100.57 and was trading near 100.30 during Thursday’s Asian session.
The Greenback came under modest pressure as demand for traditional safe-haven assets weakened after reports emerged that the United States and Iran had reached a preliminary agreement aimed at ending the conflict involving Iran and Israel. According to reports, the framework was endorsed by senior officials from both sides earlier in the week before being formally approved by US President Donald Trump and Iranian President Masoud Pezeshkian.
Despite the pullback, the US Dollar may find renewed support as expectations grow that the Federal Reserve could tighten monetary policy further later this year. The Fed’s June Summary of Economic Projections revealed that half of the Federal Open Market Committee (FOMC) members anticipate at least one additional rate increase in 2026. Persistent inflationary pressures and a resilient labor market continue to strengthen the case for higher borrowing costs, even amid economic uncertainty linked to tensions in the Middle East.
At its latest meeting, the FOMC unanimously decided to leave the federal funds rate unchanged at 3.50%–3.75%. Meanwhile, newly appointed Federal Reserve Chair Kevin Warsh emphasized his commitment to restoring price stability, signaling a firm stance against inflation during his first policy meeting at the helm of the central bank.
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