United States Dollar Index falls to near 101.00 after US-Iran strike halt

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is losing ground after posting minor losses in the previous trading day, trading around 101.20 during the Asian session on Monday.

The Greenback falls sharply as geopolitical tensions eased following a weekend pause in military hostilities between the US and Iran, offering a reprieve after 13 days of escalating conflict. However, market participants remain cautious about potential supply disruptions after Iran-backed Houthis in Yemen claimed responsibility for attacks on Saudi Arabian facilities along the Red Sea.

Reports suggest the US halted strikes amid growing concerns over depleting interceptor supplies and a shrinking list of remaining targets within Iran. Additionally, General Dan Caine, Chairman of the Joint Chiefs of Staff, reportedly cautioned President Trump on Friday that continuing the military campaign would severely strain critical munitions reserves.

On the policy front, the Federal Reserve (Fed) is widely expected to hold interest rates steady on Wednesday before resuming rate hikes in September. However, a minority of market participants still anticipate a surprise move at this week's meeting. Moving forward, investors are closely watching upcoming economic indicators, including advance Q2 GDP data, PCE inflation figures, and earnings reports from major US corporations, for further insight into the underlying strength of the economy.