The U.S. dollar held firm at a one-month high on Tuesday, backed by growing market speculation that the Federal Reserve could deliver an unexpected interest rate hike to curb persistent inflationary pressures. The U.S. dollar index, which tracks the greenback against a basket of six major currencies, consolidated around 101.45 as traders assigned a nearly 38% probability to a 25-basis-point rate increase at the conclusion of the central bank’s two-day policy meeting. Although a temporary diplomatic pause in U.S.-Iran hostilities helped lower global crude oil prices and eased immediate cost concerns, U.S. Treasury yields retreated only modestly, sustaining broad-based support for the greenback. Analysts noted that a lack of aggressive bond-buying at the short end of the yield curve reflects persistent inflation anxiety following recent energy volatility. Foreign exchange markets showed the dollar maintaining strength against major peers, trading near 163.73 against the Japanese yen while keeping the euro and British pound under pressure. Investors now await upcoming U.S. second-quarter GDP data and the core Personal Consumption Expenditures (PCE) price index for definitive signals on economic resilience and monetary policy direction.
U.S. Dollar Reaches One-Month Peak as Markets Price in Risk of Fed Rate Hike
