Dollar Steadies at 100 as Iran Tensions and Fed Expectations Support Buck

The US Dollar Index (DXY) has stabilized around the psychological mark of 100.00, despite struggling to capitalize on its previous day's solid recovery from mid-June lows.

This stability is attributed to the ongoing US-Iran tensions, which have led to a geopolitical risk premium that supports the dollar. The uncertainty surrounding potential peace talks between the two nations has also added to the dollar's appeal as a safe-haven asset.

Meanwhile, data released on Monday showed that US manufacturing sector activity increased to its highest level in over four years in July, with the US ISM Manufacturing PMI rising to 55.6 from 53.3 in June. This reaffirms hawkish Federal Reserve expectations and validates the near-term positive outlook for the DXY.

Traders are awaiting the release of the US employment details, or Nonfarm Payrolls (NFP) report, due on Friday before making any aggressive bets on the dollar's future direction.