Dollar Index Edges To 101.55 While Yen Hits Near 40-Year Lows As Markets Price 81% Chance Of September Rate Hike Ahead Of Two-Day FOMC Meeting
According to Business Recorder / Reuters, the US dollar held at a one-month high on July 28, 2026 as traders weighed an increasingly real chance of a Federal Reserve rate hike at this week’s two-day policy meeting, even as a pause in US strikes on Iran pushed oil prices lower and somewhat eased inflation concerns.
The dollar index edged up 0.03 percent to 101.55, with the euro down 0.01 percent at $1.1366. The dollar gained 0.05 percent against the Japanese yen to 163.82, while sterling eased 0.02 percent to $1.3284.
Market expectations for at least a 25 basis point hike at Wednesday’s Fed meeting have jumped from 16 percent a week ago to 36.3 percent, according to CME FedWatch. A September hike is now priced at 81 percent probability.
“If we do get a surprise hike, surely that’s going to lend support to the dollar,” said Mahjabeen Zaman, head of FX research at ANZ Bank.
Chris Weston of Pepperstone noted the lack of meaningful buying at the front end of the US Treasury curve as a key dollar support. US Q2 GDP and core PCE inflation data are also due this week.
The dollar is pricing in a future. The question is how many basis points that future costs. Check out our previous coverage of global markets on The Trusted Times.
