The US Dollar fell against major peers after cooler-than-expected June inflation data prompted traders to sharply reduce expectations for another Federal Reserve rate increase this year. The softer reading reinforced the view that price pressures are easing more quickly than previously assumed, reducing support for the Greenback.
The US Dollar Index, which measures the currency against a basket of six major counterparts, was down 0.12% and trading near 101. The move reflected a broader pullback in the dollar after the June Consumer Price Index showed headline inflation rising 3.5% from a year earlier, down from 4.2% in May and below the 3.8% consensus. Core CPI, which strips out food and energy, increased 2.6% year on year, also below both the prior 2.9% reading and market expectations of 2.8%.
Interest-rate futures now imply a much lower probability of a rate hike at this month’s policy meeting. The likelihood has dropped to 16.6% from 41.7% a day earlier, underscoring the scale of the reassessment triggered by the inflation report. Investors are now looking for further evidence that disinflation is taking hold before betting on additional tightening.
Attention is shifting to the June Producer Price Index, due later in the day. The wholesale inflation report could offer a more complete picture of price trends across the economy and help shape expectations for the Fed’s next move. A softer-than-expected reading would likely add to pressure on the dollar, while a stronger print could temper some of the recent dovish repricing.
At the same time, geopolitical tensions between the US and Iran remain a factor in currency markets. Any further escalation could support demand for the dollar as a safe-haven asset, partially offsetting the negative impact of weaker inflation data.The US Treasury said it has frozen more than $130 million in cryptocurrency linked to Iran, intensifying financial pressure on Tehran as tensions in the Middle East escalate. Treasury Secretary Scott Bessent said the action was part of a broader effort to disrupt what Washington describes as Iran’s illicit use of digital assets to finance and sustain prohibited activity.
The freeze followed onchain data indicating that four Tron-based wallets holding about $131 million in USDt were blocked by Tether. Bessent later said the wallets were connected to Iran’s central bank. The move underscores how stablecoins and blockchain rails have become a growing focus for sanctions enforcement, particularly when authorities believe funds are being used to move value outside the traditional banking system.
The latest asset freeze comes as the ceasefire between the US and Iran has collapsed. The US said it renewed its blockade of Iranian ports, while US Central Command announced a new round of strikes on Iran. Iran’s military, meanwhile, said it had carried out drone strikes on US military facilities at Al Azraq Air Base in Jordan.
This is not the first time Washington has used digital asset controls against Iran. In April, Tether said it had frozen more than $344 million in USDT at the request of US authorities. In May, Bessent said the US had seized about $1 billion in Iranian crypto holdings as part of Operation Economic Fury, the financial pressure campaign launched in March 2025.
US officials have framed the campaign as an effort to cut off procurement networks and restrict the Iranian military’s access to funding and equipment. The latest freeze suggests that digital assets will remain a central tool in that effort, as the Treasury moves to identify and block transactions it believes are tied to sanctioned actors.
