Dollar Strengthens, Market Awaits PCE Data
The US dollar index hovered around 101 on Tuesday (June 23rd), holding near its highest level since May 2025. This strengthening occurred as market participants monitored developments in peace talks between the United States and Iran, while still keeping an eye on the possibility of a Federal Reserve interest rate hike this year.
Market sentiment was boosted after Washington granted Tehran a 60-day temporary permit to sell oil to the international market. This policy raised hopes that global oil supplies could recover more quickly, particularly from the Persian Gulf region. If energy supplies improve, inflationary pressures from oil prices could potentially ease.
However, the US dollar remained strong as the market still expects the Fed to maintain its hawkish stance. Last week, the US central bank signaled that inflationary pressures remain a major concern, and even revised its inflation projection upward. This situation has strengthened expectations of interest rate hikes, providing additional support for the dollar.
Several major institutions, such as Deutsche Bank and BofA Global Research, have even updated their projections to include the possibility of a September interest rate hike. Investors' attention is now focused on this week's Personal Consumption Expenditures (PCE) report, the Fed's favorite inflation indicator. This data will provide important clues to determine whether price pressures remain strong or are beginning to ease. (asd)
Source: Newsmaker.id
