The US Dollar Index remains below the 101 mark as markets scale back expectations for a hawkish Federal Reserve.

Last Updated on 15/07/2026

• The US Dollar Index trades lower against its major counterparts as markets scale back expectations for a more hawkish Federal Reserve.
• US inflation softened in June, with both headline and core CPI easing to 3.5% and 2.6% year-over-year, respectively.
• Fed Chair Kevin Warsh reiterated that the central bank remains firmly committed to bringing inflation under control, emphasizing zero tolerance for persistently elevated price pressures.

The US Dollar (USD) weakens against its major peers as investors scale back expectations for further Federal Reserve (Fed) rate hikes this year after softer-than-anticipated US inflation data for June. The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, is trading around 100.80, down roughly 0.12% on the day.

Data released by the US Bureau of Labor Statistics (BLS) on Tuesday showed headline Consumer Price Index (CPI) inflation eased to 3.5% year-over-year in June from 4.2% in May, coming in below the market forecast of 3.8%. Meanwhile, core CPI, which strips out food and energy prices, rose 2.6% annually, undershooting both the 2.8% consensus estimate and May’s 2.9% reading.

Following the inflation report, market expectations for another Fed rate increase this month dropped sharply. According to the CME FedWatch Tool, the probability of a rate hike has fallen to 16.6%, down from 41.7% a day earlier.

Despite the softer inflation figures, Fed Chair Kevin Warsh maintained a firm stance on price stability during his congressional testimony on Tuesday, stressing that policymakers have “no tolerance for persistently elevated inflation.” He added that if monetary policy remains on the right path, the inflation surge seen over the past five years will eventually become a thing of the past.

Market participants now await the release of June’s US Producer Price Index (PPI), scheduled for 12:30 GMT, for additional insight into wholesale inflation trends and the Fed’s policy outlook.

Meanwhile, rising tensions between the United States and Iran could continue to support demand for the Greenback, as investors seek the safety of the world’s reserve currency amid growing geopolitical uncertainty.