The dollar index scales above 101 mark for the first time in more than a year amid growing indications of a Federal rate hike in the near future. The Federal Reserve's hawkish tone at its latest meeting is seen bolstering gains the U.S. dollar. However, the yield on the US 10-year Treasury note fell to 4.48% on Tuesday as markets reacted to signs that a US'Iran deal could move closer to a lasting agreement. The dollar index hovered around 101.24 this morning, trading at its highest level in more than a year as expectations for Federal Reserve rate hikes this year remained strong. An unexpectedly hawkish Fed meeting chaired by Kevin Warsh last week boosted expectations for a year-end interest rate hike. Markets are also looking ahead to this week's PCE inflation report, the Fed's preferred inflation gauge, for additional clues on the outlook for monetary policy. Among basket currencies, British pound weakened against a firmer US dollar and tumbled under $1.32 mark as investors balanced easing political uncertainty with weaker UK economic data. However, euro slumped to a one-year low. The Swiss franc weakened to near 1.23 per US dollar, falling near its weakest level since November 2025 amid a stronger U.S. dollar and lower oil prices.
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