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United States Dollar Index rises as Waller puts July Fed rate hike in play, CPI awaited

  • The US Dollar regains momentum after hawkish remarks from Fed Governor Christopher Waller.
  • Markets now price in a 41% chance of a Fed interest rate hike this month.
  • US CPI data takes centre stage on Tuesday ahead of Fed Chair Kevin Warsh’s two-day congressional testimony.

The US Dollar Index (DXY) regains momentum on Monday after hawkish remarks from Federal Reserve (Fed) Governor Christopher Waller boosted expectations of an interest rate hike as early as this month.

At the time of writing, the index, which tracks the Greenback’s value against a basket of six major currencies, trades around 101.25, recovering from an intraday low of 100.80.

Speaking at the New York Association for Business Economics on Monday, Waller said, “There is still a credible case for inflation to begin to fall back to our 2% goal with policy at its current setting. But I am concerned about the equally plausible case that data in the coming weeks will show that inflation will remain at its elevated level or even trend higher, requiring tighter monetary policy in the near term.”

According to the CME FedWatch Tool, traders are now pricing in a 41% chance of a rate hike at the July meeting, up from 25% a week ago, while the probability of a September hike has risen to 75%.

Attention now turns to Tuesday's US Consumer Price Index (CPI) report, where headline inflation is expected to fall 0.1% MoM in June following a 0.5% increase in May, while core CPI is seen holding steady at 0.2%.

Oil-driven inflation risks are also back in focus after renewed fighting in the Middle East raised fresh concerns about supply disruptions through the Strait of Hormuz, which carries around 20% of global Oil supplies.

Tehran claimed it has once again closed the Strait, while US President Donald Trump said in a Truth Social post that the waterway "is OPEN, and will remain OPEN, with or without Iran," adding that the US would reinstate the blockade of Iranian ships in the Strait.

West Texas Intermediate (WTI) trades around $77.72, up more than 8% on the day and at its highest level since June 22.

With Fed tightening expectations strengthening and geopolitical tensions offering additional support, the US Dollar’s path of least resistance remains tilted to the upside.

Traders will also watch Fed Chair Kevin Warsh’s congressional testimony on Tuesday and Wednesday for fresh policy signals.

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.

USDEURGBPJPYCADAUDNZDCHF
USD0.25%0.33%0.47%-0.04%0.48%0.14%0.66%
EUR-0.25%0.09%0.22%-0.29%0.24%-0.07%0.43%
GBP-0.33%-0.09%0.15%-0.38%0.17%-0.15%0.38%
JPY-0.47%-0.22%-0.15%-0.51%0.01%-0.29%0.25%
CAD0.04%0.29%0.38%0.51%0.54%0.25%0.77%
AUD-0.48%-0.24%-0.17%-0.01%-0.54%-0.27%0.25%
NZD-0.14%0.07%0.15%0.29%-0.25%0.27%0.53%
CHF-0.66%-0.43%-0.38%-0.25%-0.77%-0.25%-0.53%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

Author

Vishal Chaturvedi

I am a macro-focused research analyst with over four years of experience covering forex and commodities market. I enjoy breaking down complex economic trends and turning them into clear, actionable insights that help traders stay ahead of the curve.

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