Forex
Home›Forex›Major Pairs›Dollar firms as Middle East tensions and renewed tarif…
Dollar firms as Middle East tensions and renewed tariffs revive inflation fears
Markets are pricing a 25 basis point Fed hike in September, with another hike also expected for March, while gold faces pressure from higher rate expectations.
The US dollar strengthened versus other major currencies amid escalating Middle East tensions and President Trump’s decision to move forward with a new round of tariffs after previously imposed levies expired, Action Forex said.
Despite June inflation data showing US prices slowed more than expected, the outlet noted that the renewed conflict risk, the reclosure of the Strait of Hormuz, and a rally in oil prices are reviving concerns that inflation could reaccelerate.
Action Forex reported that Fed fund futures show investors are fully pricing a quarter point hike by the Fed in September and are also factoring in another hike for March, alongside a 35% chance of an additional hike this week.
With Wednesday’s Fed decision potentially affecting expectations for Treasury yields, the outlet added that higher opportunity costs could weigh on gold, and that June PCE inflation data will be released the day after the meeting.
Latest closeGold $4,051.10 ▼2.3%