The dollar index stabilized around 99.7 on Tuesday after weakening in the previous session, as investors shifted their attention from the US-Iran peace deal announcement to the Federal Reserve’s upcoming policy meeting. The central bank is widely expected to keep interest rates unchanged at its first meeting under new Chair Kevin Warsh. Still, policymakers face a challenging environment, with recent inflation data coming in hotter than expected as the conflict with Iran pushed energy prices higher.
Markets also looked ahead to policy decisions from central banks in Japan, Australia, the UK, and other major economies later this week. On Monday, the dollar came under pressure after President Donald Trump announced that the US had reached a peace agreement with Iran that would restore access through the Strait of Hormuz. The deal is expected to be signed in Switzerland on Friday.
