US Dollar Index Rises Above 99.00 on Fed Rate Hold and Middle East Tensions

US Dollar Index Rises Above 99.00 on Fed Rate Hold and Middle East Tensions

The US Dollar Index (DXY) pushed above the 99.00 mark in Thursday’s early Asian session, advancing for the third consecutive day as investors flock to the Dollar amid monetary policy uncertainty and rising geopolitical tensions.

Fed Holds Rates, Warns on Inflation

At its June policy meeting, the Federal Reserve held interest rates steady at the 4.25%–4.50% range, aligning with expectations. While the Fed projects two rate cuts of 50 basis points in 2025, Chair Jerome Powell emphasized in the post-meeting press conference that:

“Inflation could edge higher in coming months, especially under the impact of tariff-related pressures.”

He added that the central bank will remain cautious, signaling data-dependent decisions moving forward.

Rising Geopolitical Tensions Support the USD

The DXY also found strong safe-haven support as Bloomberg and the Wall Street Journal reported that:

• US officials are preparing for a possible strike on Iran.
• President Donald Trump has approved strike plans, pending Tehran’s response on its nuclear ambitions.

The ongoing Israel-Iran conflict, coupled with the potential for US military involvement, has created global market jitters, pushing the USD, gold, and treasuries higher.

📈 Related: Gold Surges on Iran Strike Risks and Fed Pause

DXY Outlook: Momentum Remains Bullish

With the Fed remaining cautious, inflation signals still elevated, and Middle East instability escalating, the USD Index is expected to remain firmly supported in the short term.

💱 Track live US Dollar Index movement on Tredu FX Dashboard

Conclusion

The US Dollar Index’s break above 99.00 underscores the dual impact of domestic monetary policy caution and global conflict concerns. As inflation remains sticky and geopolitical risks intensify, traders will continue to favor the Greenback for safety and yield advantage.