08.06.202612:28:41UTC+00Dollar Edges Down Below 100

The dollar index slipped back below the 100 level on Monday after briefly touching 100.2 earlier in the session, as traders continued to gauge the evolving situation in the Middle East. Reports suggested that Iran’s military had ceased strikes against Israel but warned that it would resume hostilities if Jerusalem maintained its operations in Lebanon. At the same time, President Trump indicated that Iran and Israel were seeking to reach a ceasefire agreement and that negotiations with Iran on a final deal were making progress. In response, oil prices gave up part of their earlier gains. Still, worries that a drawn-out confrontation with Iran could stoke inflationary pressures continued to weigh on sentiment, with futures markets implying about a 52% chance of a Federal Reserve rate hike as soon as October. Investors are now focused on this week’s US CPI and PPI releases for further insight into the inflation outlook. The dollar weakened broadly, with its steepest losses posted against the Australian dollar and the Japanese yen.