FX.co ★ Dollar Holds Near 18-Month High

The US dollar index hovered around 102.5 on Tuesday, holding near its highest level since April 2025 as investors awaited key inflation data that could shape the Federal Reserve’s monetary policy outlook. The US consumer price index is scheduled for release on Wednesday, followed by producer price data on Thursday. Current market pricing indicates roughly an 80% probability that the Fed will leave interest rates unchanged this month, alongside nearly an 88% chance of a rate hike in December. Investors are also monitoring existing home sales figures and comments from Fed officials Christopher Waller, Tom Barkin, and Susan Collins on Tuesday. The dollar drew additional support from safe-haven flows amid escalating geopolitical tensions, with the US considering support for Saudi Arabia in its conflict with Iran-backed Houthi militants in Yemen, and the recently announced Russia-Ukraine “energy ceasefire” already breached.