The DXY index remains steady around 99.00 amid geopolitical uncertainty and anticipation of key US inflation data later this week.
The US Dollar Index (DXY) traded sideways near 99.00 on Wednesday, reflecting investor caution amid mixed signals from Iran and upcoming US economic releases. Tehran’s accusations of US ceasefire violations and threats of retaliation contrasted with statements from Iranian officials leaving room for negotiation, keeping markets on edge.
US Consumer Confidence data for May showed a slight decline, attributed to inflation concerns linked to the Iran conflict and weaker employment sentiment. However, traders are focusing on Thursday’s Personal Consumption Expenditures (PCE) Price Index, which could provide clearer signals on the Federal Reserve’s interest rate trajectory and influence the dollar’s near-term direction.
A spokesperson for Iran’s Islamic Revolutionary Guard Corps (IRGC) indicated that retaliation remains unlikely but warned of readiness to respond to further attacks. The geopolitical standoff, combined with economic data, has left the dollar rangebound midweek.