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FOREX-Dollar poised for best month in nearly a year; eyes on Gulf tension, jobs data
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FOREX-Dollar poised for best month in nearly a year; eyes on Gulf tension, jobs data
Jun 28, 2026 10:50 PM

* Dollar index on track for 2.5% jump in June

* Middle East tensions, US jobs data in focus

* Markets await ECB forum for policy signals

(Update to Asia afternoon, add quotes)

By Jiaxing Li

HONG KONG, June 29 (Reuters) - The U.S. dollar held firm on

Monday, on track for its biggest monthly gain in nearly a year,

as Gulf tensions and elevated Treasury yields underpinned demand

ahead of key jobs data later in the week.

The U.S. and Iran traded fresh barbs over the weekend before

they agreed to stop tit-for-tat attacks and meet in Qatar on

Tuesday, leaving investors nervous about the declared ceasefire.

Oil prices rose on Monday as strikes again slowed energy

shipping in the Strait of Hormuz, supporting safe-haven bids for

the greenback.

The euro was flat at $1.1386 after hitting a 13-month

low against the dollar last week and on track for a 2.4% monthly

decline. Sterling traded 0.1% lower at $1.3198 and was

down 1.9% for the month to date.

The risk-sensitive Australian dollar fetched

$0.6889, heading for a 4.1% monthly decline. The New Zealand

dollar hovered near a seven-month low at $0.5646, down

5.8% for the month.

The Japanese yen last traded at 161.75, continuing to

languish near a 40-year low.

The dollar index, which measures the greenback

against a basket of currencies including the yen and the euro,

was steady at 101.34, near the 13-month high seen last week.

It is now on track for a 2.5% gain for June, which marks the

biggest monthly advance since July last year.

Tensions in the Middle East have continued to stoke

inflation pressures, while a surprisingly hawkish debut from

Kevin Warsh as Federal Reserve chair earlier in the month has

reversed market expectations for rate cuts this year and sent

Treasury yields sharply higher.

The market narrative has shifted to a "high-for-longer" U.S.

rates environment following the June Federal Open Market

Committee meeting, which anchors the dollar's strength amid

macro strength, according to Lloyd Chan, a senior currency

analyst at MUFG Bank.

"USD downside likely remains contained unless there is a

clear dovish pivot by the Fed or a material deterioration of US

macro data," he said.

ECB FORUM, U.S. JOBS DATA IN FOCUS

Investors are now watching U.S. non-farm payrolls

and the unemployment rate due this

week, which could offer fresh clues on the strength of the

labour market and the outlook for Fed policy.

"We expect the USD to grind higher in coming weeks because

of the 'US exceptionalism' narrative," Joseph Capurso, head of

foreign exchange at Commonwealth Bank of Australia, said in a

note.

A strong and improving labour market is a recipe for higher

U.S. interest rates and the dollar, he said.

The European Central Bank's annual forum this week is also

under close watch as investors continue to monitor evolving

central bank policies amid lower oil prices and stock market

volatility.

ECB President Christine Lagarde opens the forum on Monday,

followed by a key policy panel on Wednesday featuring Fed Chair

Warsh, with markets looking for a clearer read on the new Fed

chief.

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