Dollar Rally Pauses

2026-06-25 13:24 By Joana Taborda 1 min. read

The dollar index weakened slightly 101.4 on Thursday, pausing its recent rally after climbing to its highest level since early 2025 in previous session.

Investors assess a fresh batch of US economic data alongside the ongoing decline in oil prices, which have now returned to pre-conflict levels, and their implications for the Fed’s monetary policy outlook.

The latest US PCE inflation report came in broadly in line with expectations.

While inflation remains well above the Fed’s 2% target, the data helped ease concerns about a sharper-than-expected acceleration in price pressures.

At the same time, first-quarter GDP growth was revised higher and personal spending accelerated in May, suggesting consumer demand remains resilient.

Meanwhile, traders slightly scaled back expectations for Fed tightening, although markets continue to price in at least one rate hike this year.

The probability of a Fed rate increase in September fell to 63%, down from 68% the previous day.



News Stream
Dollar Rally Pauses
The dollar index weakened slightly 101.4 on Thursday, pausing its recent rally after climbing to its highest level since early 2025 in previous session. Investors assess a fresh batch of US economic data alongside the ongoing decline in oil prices, which have now returned to pre-conflict levels, and their implications for the Fed’s monetary policy outlook. The latest US PCE inflation report came in broadly in line with expectations. While inflation remains well above the Fed’s 2% target, the data helped ease concerns about a sharper-than-expected acceleration in price pressures. At the same time, first-quarter GDP growth was revised higher and personal spending accelerated in May, suggesting consumer demand remains resilient. Meanwhile, traders slightly scaled back expectations for Fed tightening, although markets continue to price in at least one rate hike this year. The probability of a Fed rate increase in September fell to 63%, down from 68% the previous day.
2026-06-25
Dollar Stands Tall on Hawkish Fed Bets
The dollar index traded near 101.5 on Thursday, holding around its highest levels in more than a year as investors continued to price in Federal Reserve interest rate hikes later this year, while awaiting a key inflation report for further direction. Last week, the Fed signaled growing support for tighter monetary policy, with Chair Kevin Warsh reaffirming his commitment to restoring price stability. Those expectations have largely outweighed the impact of progress in US-Iran peace negotiations, which have pushed oil prices back to pre-conflict levels and helped ease inflation concerns. Market participants are now focused on the latest PCE price index report, the Fed’s preferred measure of inflation. Other closely watched releases include final first-quarter GDP figures, May personal income and preliminary durable goods orders data, as well as weekly jobless claims for the period ending June 20.
2026-06-25
Dollar Continues to Strengthen
The dollar index extended its gains to above 101.7 on Wednesday, reaching its highest level since March 2025 and putting it on track for its longest winning streak in more than a month. The greenback continued to draw support from expectations that the Fed will keep monetary policy restrictive, with traders currently assigning a roughly 68% probability of an interest-rate increase in September, up from 29% a week earlier. Recent volatility in equity markets also boosted demand for safe-haven assets. The dollar advanced against most major currencies, including the euro, the pound, and the Swiss franc, as investors priced in a more hawkish Federal Reserve than other major central banks, supported by resilient economic activity and inflation that is expected to remain well above its target. The dollar has gained 3.5% so far this year.
2026-06-24