Federal Reserve officials hint at a possible rate increase later this year, supporting the USD amid hawkish policy expectations.
The US Dollar Index (DXY) steadied near 100.83 in Asian trading Friday, following two days of gains. The Federal Reserve’s hawkish tone, with nearly half of officials signaling a potential rate hike later this year, bolstered the greenback’s outlook.
The Federal Open Market Committee held rates at 3.5%–3.75% but emphasized price stability as its guiding principle. New Fed Chair Kevin Warsh underscored this stance in his debut press conference, reinforcing market expectations for tighter policy.
Easing US-Iran tensions may weigh on the USD by reducing safe-haven demand. A preliminary deal to end the conflict could shift investor focus toward riskier assets, though the Fed’s stance remains the dominant driver.