US, June 09 : The U.S. dollar remained close to a two-month peak on Tuesday as geopolitical tensions in the Middle East and shifting interest rate expectations supported demand for the currency. Market sentiment stayed cautious after renewed uncertainty over the Iran–Israel situation weighed on risk assets, while traders increased bets that the Federal Reserve could raise interest rates later this year following strong U.S. economic data.
Although Iran and Israel paused hostilities after diplomatic intervention, lingering tensions and the possibility of renewed conflict kept investors on edge. Concerns that the fragile situation could disrupt energy supplies helped sustain elevated oil prices, further strengthening safe-haven flows into the U.S. currency.
In major currency moves, the euro and British pound slipped slightly in Asian trade after touching multi week lows in the previous session. Commodity-linked currencies also weakened, with the Australian and New Zealand dollars edging lower amid subdued risk appetite. The Japanese yen continued to hover near levels seen as critical for possible official intervention, reflecting ongoing pressure in Asian currency markets.
The dollar index stayed steady near its recent high, reflecting broad-based strength in the greenback. Analysts noted that a combination of geopolitical risk and resilient U.S. economic indicators has reinforced expectations that monetary policy may remain tighter for longer.
Attention now turns to upcoming U.S. inflation data, which is expected to provide further signals on the Federal Reserve’s policy path. Stronger-than-expected price readings could intensify speculation of additional tightening, potentially extending support for the dollar while adding pressure on equity markets.