Dollar Eases But Hovers Close to 2-Month Highs

2026-06-04 13:13 By Joana Taborda 1 min. read

The dollar index slipped to 99.2 on Thursday, snapping a three-session winning streak, as crude prices retreated after hopes increased that a ceasefire agreement between Israel and Lebanon could pave the way for a broader diplomatic deal with Iran.

Despite the improvement in market sentiment, uncertainty remains elevated and the geopolitical situation continues to be highly fragile, with oil prices still significantly above pre-conflict levels and the greenback continuing to trade near two-month highs.

Investors price in the possibility of a Fed interest rate hike before year-end, potentially as early as October, amid concerns that higher energy costs could fuel inflationary pressures.

At the same time, recent labor market data have pointed to a resilient US economy, with employment conditions strengthening over the past two months.

Friday's jobs report is expected to provide further clues about the health of the labor market and the outlook for monetary policy.



News Stream
Dollar Eases But Hovers Close to 2-Month Highs
The dollar index slipped to 99.2 on Thursday, snapping a three-session winning streak, as crude prices retreated after hopes increased that a ceasefire agreement between Israel and Lebanon could pave the way for a broader diplomatic deal with Iran. Despite the improvement in market sentiment, uncertainty remains elevated and the geopolitical situation continues to be highly fragile, with oil prices still significantly above pre-conflict levels and the greenback continuing to trade near two-month highs. Investors price in the possibility of a Fed interest rate hike before year-end, potentially as early as October, amid concerns that higher energy costs could fuel inflationary pressures. At the same time, recent labor market data have pointed to a resilient US economy, with employment conditions strengthening over the past two months. Friday's jobs report is expected to provide further clues about the health of the labor market and the outlook for monetary policy.
2026-06-04
Dollar Holds Near Two-Month High
The dollar index traded around 99.4 on Thursday, remaining close to a two-month high as stronger-than-expected US labor market data reinforced expectations of tighter Federal Reserve policy. The latest ADP report showed private-sector employment increased by 122K in May, surpassing forecasts and marking the strongest reading since January 2025. Earlier this week, JOLTS data revealed that job openings rose in April to their highest level since November 2024. Investors are now awaiting Friday’s nonfarm payrolls report for further insight into labor market conditions. The dollar also continued to draw support from escalating tensions in the Middle East, which have kept oil prices elevated and added to inflationary pressures. Markets currently assign an 85% probability to a quarter-point Fed rate hike by year-end, up from 60% a week earlier.
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