FX.co ★ Dollar Hovers at 13-Month High

The dollar index hovered around 101 on Tuesday, near its highest level since May 2025, as investors weighed signs of progress in US-Iran peace talks alongside the outlook for Federal Reserve rate hikes this year. In a key development, Washington granted Tehran a 60-day license to sell oil on international markets, reinforcing expectations of a quicker recovery in global supply. At the same time, markets remain positioned for further Fed tightening after the central bank’s hawkish signals last week and its upward revisions to inflation projections. Both Deutsche Bank and BofA Global Research now anticipate a rate increase in September. Attention is turning to this week’s PCE report, the Fed’s preferred inflation gauge, which could provide fresh insight into underlying price pressures.