US Dollar Index holds gains near 99.00 ahead of CPI data

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is halting its four-day losing streak and trading around 98.90 during the Asian hours on Friday. Traders are awaiting the US Consumer Price Index (CPI) report due later in the North American session, a key catalyst for near-term Federal Reserve (Fed) policy direction.

The Greenback remains supported by renewed risk aversion, driven by persistent uncertainty surrounding the United States (US)–Iran ceasefire. Market sentiment stays cautious as Israel continues strikes on Hezbollah, despite Benjamin Netanyahu stating that Israel will soon begin direct negotiations with Lebanon. Meanwhile, US President Donald Trump said US forces will remain deployed around Iran until full compliance with the agreement is achieved.

JD Vance, along with senior envoys Steve Witkoff and Jared Kushner, is scheduled to meet in Pakistan this weekend to discuss a potential long-term deal with Iran. In contrast, Esmaeil Baghaei said any negotiations to end the conflict depend on US compliance with ceasefire commitments, including halting hostilities in Lebanon, an interpretation rejected by Washington and Israel.

Additionally, the Federal Reserve's March Meeting Minutes indicate policymakers are maintaining a wait-and-see approach, while acknowledging that inflation risks linked to higher oil prices are becoming more balanced.