The dollar index traded around 100.8 on Monday, remaining close to its strongest level since May 2025 as investors assessed evolving developments in US-Iran peace negotiations while awaiting a key US inflation reading. Reports suggested that Washington and Tehran had agreed on a roadmap toward a final deal within 60 days, easing concerns after both sides exchanged fresh threats linked to the conflict in Lebanon. Market participants are now focused on this week’s US PCE price index release, the Federal Reserve’s preferred measure of inflation. Last week, the Fed left interest rates unchanged but struck a more hawkish tone. Nine of the 19 policymakers now anticipate at least one rate increase before the end of the year, with markets increasingly pricing in a potential hike as early as September. Elsewhere, traders continued to monitor the Japanese yen amid rising intervention concerns and the British pound against the backdrop of political uncertainty in London.
