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DXY stays near 100.00 as US-Iran tensions and US data support the dollar
US ISM Manufacturing PMI rose to 55.6 in July from 53.3 in June, reinforcing hawkish Fed expectations even as traders wait for Friday’s nonfarm payrolls.
The US Dollar Index, which gauges the dollar against a basket of currencies, held close to the 100.00 level, remaining nearly flat after a modest Asian-session uptick. FXStreet reports the index has stalled after a prior rebound from its lowest level since mid-June.
FXStreet links the dollar’s support to US-Iran geopolitical risk. Iran said there are no ongoing talks with the US and no plans for meetings, while US President Donald Trump cited resumed negotiations to justify calling off weekend attacks, and unconfirmed reports of drone strikes on US assets in Kuwait prompted traders to price in a geopolitical risk premium.
The outlet also points to Iran’s stance on shipping through a strategic waterway, with a senior adviser warning Tehran will not permit routes other than its own and warning of serious risk to US vessels and forces if the standoff continues. That backdrop has also helped lift crude oil prices, reviving inflation concerns and keeping bets for at least one additional US rate hike on the table.
On the economic front, data released Monday showed US manufacturing activity rose to the highest level in more than four years. FXStreet says the ISM Manufacturing PMI increased to 55.6 in July from 53.3 in June, ahead of consensus, though traders may still hold off on aggressive positioning ahead of Friday’s nonfarm payrolls release.
Latest closeWTI crude $80.00 ▼5.5%|Dollar index 99.99 ▲0.2%