The US dollar was steady during trading on Tuesday, as investors assessed the likelihood of the Federal Reserve raising interest rates this week, despite a decline in oil prices that eased inflationary pressures.
During trading, the dollar index settled at 101.50 points, after touching its highest level since July 1st. The euro rose 0.05% to $1.1370, while the dollar traded at 163.745 Japanese yen, and the British pound climbed 0.1% to $1.330.
Monetary policy estimates
Investors have been making predictions about U.S. monetary policy in recent months, with Treasury yields rising since April on inflation concerns linked to tensions between the United States and Iran.
US President Donald Trump yesterday renewed his call for the Federal Reserve to lower interest rates, commenting: “The United States should have the lowest interest rate in the world.”
Despite the decline in oil prices following the United States' suspension of its attacks on Iran over the weekend, US bond yields remain near their highest levels in several months.
The Federal Reserve concludes its two-day meeting tomorrow, Wednesday, at a time when warnings from several major financial institutions are increasing about the possibility of raising interest rates, following the significant rise in oil prices this month.
Market estimates suggest a roughly 40% probability of a 25-basis-point rate hike at Wednesday's meeting, compared to roughly 20% a week earlier, while the probability of the hike being implemented by September rises to around 95%.
Investors are also awaiting the release of US GDP data for the second quarter this week, along with the core personal consumption expenditures (PCE) index, the Federal Reserve's preferred measure for monitoring inflation.
