Dollar Strengthens as Fed Hikes Loom and Iran Talks Stall
The US dollar gained strength on Wednesday due to fading optimism over progress in US-Iran talks and growing expectations of further Federal Reserve rate hikes this year. Oil prices climbed after diplomatic talks between the US and Iran appeared to hit an impasse, with US President Donald Trump rejecting a peace deal from Iran.
As a result, the rupee slipped against major currencies such as the euro, pound, and yen. The USDINR trading range for the day was 96.01-96.65, while EURINR traded between 109.41-110.55.
The Federal Reserve's hawkish remarks, combined with economic data pointing to robust growth and a resilient labor market, reinforced expectations of tighter US monetary policy. Money markets are now pricing in roughly 100 basis points of interest-rate hikes by the end of 2027.