THE US dollar index (DXY) steadied around 101.5 on Friday after coming under pressure in the previous session, but remained on course for a weekly gain as markets continued to price in the likelihood of further interest-rate increases by the United States Federal Reserve later this year.
The greenback had eased on Thursday following the latest US PCE inflation data, which broadly matched expectations. While inflation remains well above the Federal Reserve’s 2% target, the figures helped to temper fears of a more rapid acceleration in price pressures.
Market pricing continues to reflect expectations of a more restrictive monetary stance, with traders assigning an approximately 80% probability of a rate hike in December following last week’s hawkish pause by policymakers. The probability of a September increase is seen at around 63%.
New York Federal Reserve Bank President John Williams said on Thursday that inflationary pressures are expected to ease over time but remain “uncomfortably high”, underscoring the central bank’s cautious outlook.
The US Dollar Index, which measures the currency against a basket of peers including the euro, yen, pound, Canadian dollar, Swedish krona and Swiss franc, remains heavily influenced by the euro, which accounts for 57.6% of the weighting.
The euro is followed by the Japanese yen at 13.6%, sterling at 11.9%, the Canadian dollar at 9.1%, the Swedish krona at 4.2% and the Swiss franc at 3.6%.
In commodities markets, gold was set for a fourth straight weekly decline, pressured by the stronger dollar and expectations of further US monetary tightening, even as investors monitored geopolitical and trade-related uncertainties.
Spot gold edged down 0.1% to US$4,022.95 per ounce by 0046 GMT and was on track for a weekly loss of 3.4%. US gold futures for August delivery fell 0.2% to US$4,038.10.
Sentiment in the broader metals market was also shaped by developments in global trade routes, after the U.N. International Maritime Organization temporarily suspended escort operations in the Strait of Hormuz following a reported vessel attack, reviving concerns over regional stability linked to the fragile US-Iran situation.
Further pressure came from macroeconomic data showing US inflation rising above 4% in May for the first time in three years, driven in part by higher energy costs amid geopolitical tensions.
Within the Federal Reserve, policymakers maintained a cautious tone. Chicago Federal Reserve President Austan Goolsbee pointed to a “glimmer of hope” in services inflation but warned underlying price pressures remain elevated and are not yet moving decisively lower.
Traders, according to the CME FedWatch Tool, continue to anticipate multiple rate adjustments this year, reinforcing expectations of a tighter policy path.
In Asia, data showed China’s net gold imports via Hong Kong fell 38% month-on-month in May to 53.674 metric tonnes, down sharply from 86.715 tonnes in April, according to official statistics.
Elsewhere in precious metals, silver slipped 0.2% to US$57.77 per ounce, platinum was steady at US$1,600.95, and palladium rose 0.4% to US$1,188.97. All three metals were nonetheless set for weekly losses amid the stronger dollar environment and shifting rate expectations. - June 26, 2026
