The dollar index hovered near 100 on Tuesday after rebounding in the previous session, as investors continued to assess the Federal Reserve’s monetary policy outlook amid persistent uncertainty in the Middle East. Markets are currently pricing in roughly a 65% probability of a 25 basis point Fed rate hike in September, following the central bank’s decision to leave rates unchanged in July.
New York Fed President John Williams said monetary policy remains well positioned and reiterated that inflation is expected to moderate in the second half of the year. Investors are now awaiting the latest JOLTS job openings figures and international trade data, due later today, for additional clues about the strength of the US economy.
Elsewhere, the dollar recovered some ground against the yen after the US and Japan confirmed coordinated efforts to support the Japanese currency, though the potential for further intervention continues to keep markets on edge.
