USD strengthens as geopolitical risks and a 65% chance of a September Fed hike support the Greenback against major peers.
The US Dollar Index (DXY) climbed to around 100.0 for a second straight session, driven by escalating Middle East tensions and expectations of tighter Federal Reserve policy. Iran rejected diplomatic overtures from the US, heightening uncertainty over the Strait of Hormuz, a critical oil transit route.
Markets are pricing in a 65% probability of a 25-basis-point Fed rate hike in September, according to the CME FedWatch tool. The central bank held rates steady in July but signaled a hawkish stance, reinforcing the dollar’s resilience.
Currency traders remain focused on geopolitical developments and Fed policy cues as the dollar holds gains against its major counterparts.