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US Dollar Index steadies near 100 as PMI strength offsets Iran risk
DXY recovered from an intraday low of 99.42 after US ISM Manufacturing PMI jumped to 55.6 in July, while Fed hike odds remain about 60% for September.
The US Dollar Index, or DXY, stabilized in the near term around 100, following a modest rebound that helped offset last week’s sell-off, FXStreet reported. The move was supported by stronger US manufacturing data and renewed uncertainty around US-Iran talks.
FXStreet said the DXY traded near 100 after bottoming intraday at 99.42, its weakest level since June 15. It pointed to shifting sentiment after US President Donald Trump said he had called off a planned strike on Iran and after Iran denied holding talks with Washington, alongside hardline rhetoric from both sides.
The outlet also linked the dollar’s defensive demand to doubt about the prospects for direct negotiations in the near term, even as the recovery could be capped by uncertainty about the Federal Reserve’s policy path. Brown Brothers Harriman strategists said the May dollar rally has run its course, arguing the DXY is positioned to retreat toward a 96.00 to 100.00 range.
On the data front, FXStreet noted the US ISM Manufacturing PMI rose to 55.6 in July from 53.3 in June, beating the market forecast of 54 and reaching the highest level since May 2022. The focus now turns to US labor market data for clues on whether the Fed will raise rates in September, with CME FedWatch pricing roughly a 60% chance of a hike.
Latest closeDollar index 99.80 ▼0.2%