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Dollar index extends rebound from two-month low above 99.50

DXY moves up toward 99.70 while investors weigh the Fed path ahead of Wednesday’s FOMC Minutes and geopolitical risk tied to the US-Iran standoff.

Reported · Written up by our desk · Major Pairs

The US Dollar Index, DXY, extending its rebound from a two-month low, moved higher in early European trading, rising to a fresh daily high around the 99.70 area, after rebounding from about 99.30.

FXStreet linked the follow-through to safe-haven demand as the US-Iran standoff remained in focus, with higher oil prices supporting the dollar, even as uncertainty over the Federal Reserve’s policy path limited conviction.

The outlet cited softer US inflation and weak consumer spending data released last week, which have undercut expectations for imminent rate hikes, while investors continue to watch for inflation risks from higher energy prices that could push the Fed toward a more hawkish stance.

With Wednesday’s FOMC Minutes expected to be scrutinized for cues on the interest rate trajectory, FXStreet noted the US-Iran situation could keep a geopolitical risk premium in play, and it suggested waiting for strong follow-through before confirming whether the DXY has bottomed out in the near term.

Latest closeDollar index 99.64 ▼0.3%

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