US Dollar Index falls to 101 despite rising Treasury yields and Middle East tensions lifting crude oil prices.
The US Dollar Index (DXY) declined to 101 from 101.28 in late US trading, diverging from a rise in the US Treasury 2-year yield and elevated crude oil prices. The move occurred despite geopolitical tensions in the Middle East supporting oil markets.
Futures markets now price over a 50% chance of a Fed rate hike in September, though FOMC minutes revealed a divided committee with limited forward guidance. Fed Chair Kevin Warsh is not expected to provide clear signals during upcoming congressional hearings, particularly ahead of a softer US CPI print next week.
Traders remain cautious amid volatile headline risks, including President Donald Trump’s announcement ending an interim ceasefire with Iran and Treasury Secretary Scott Bessent’s remarks on oil price premiums for secure supply.