The dollar index hovered around 101 on Thursday, largely unchanged from the prior two sessions, as investors weighed the inflation and monetary policy implications of the conflict in the Middle East. The US and Iran continued to exchange strikes, though the sharp rise in oil prices eased after a steep two-day surge.
Minutes from the Federal Reserve’s June meeting showed policymakers remain split on the future path of interest rates, having discussed several potential scenarios, with only a few officials backing further hikes. Markets still anticipate at least one Fed rate increase by the end of 2026, while the probability of a move at the September meeting is estimated at about 64%.
The dollar weakened slightly against the Japanese yen as investors evaluated whether Japanese authorities had stepped in to support their currency. Meanwhile, the euro inched higher against the greenback amid firming expectations of another interest rate increase by the European Central Bank.
