Dollar Stuck in Neutral as USD/JPY Grinds Below 160
The US Dollar (USD) struggles to gain traction as USD/JPY trades around 159.60, below the 160 psychological mark. The Greenback's momentum is weighed down by receding expectations of a Federal Reserve interest-rate hike at the upcoming meeting, despite elevated long-term US Treasury yields providing some support.
The benchmark 10-year yield climbed toward 4.75% earlier on Tuesday, while the 30-year yield rose above 5.30%, its highest level since 2007. However, growing investor concerns over heavy government spending and persistent inflation have tempered expectations of a rate hike in September, with moderating US economic data also contributing to this trend.
Iran's top negotiator, Mohammad Bagher Qalibaf, stated that the Strait of Hormuz would remain closed until the US meets the conditions of the interim agreement. This development keeps inflation risks alive and prevents traders from fully ruling out a rate increase later this year.