Geopolitical risks in the Middle East drive investors toward the US Dollar, lifting the DXY index and pressuring the British Pound.
The British Pound declined 0.48% against the US Dollar, trading at 1.3371 after peaking at 1.3455 earlier. Escalating US-Iran tensions revived demand for the Greenback, pushing the US Dollar Index (DXY) up 0.14% to 101.14.
US Treasury yields rose, with the 10-year note climbing three basis points to 4.624%, signaling expectations of a potential Federal Reserve rate hike later this year. Economic data showed the ADP Employment Change 4-week average at 16.5K, below the prior 19.25K, ahead of key jobless claims data.
Investors priced in a 78% chance of a Fed rate increase by July 29, as geopolitical uncertainty overshadowed a light economic calendar. Iran proposed a 10-day ceasefire, while reports indicated the US may expand military action if tensions persist.