United States Dollar Index gathers strength above 99.00 on US-Iran truce deal uncertainty

The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, currently trades near 99.05 during the Asian trading hours on Monday. The DXY holds positive ground surrounding the US-Iran peace deal. The US ISM Manufacturing Purchasing Managers Index (PMI) report will be published later on Monday. 

Iranian Foreign Minister Abbas Araghchi said on Sunday that talks and message exchanges with Washington were ongoing, but stressed that no assessment of negotiations could be made until a clear outcome was reached, per the BBC. 

On Monday, US President Donald Trump requested that edits be made to the US-Iran deal aimed at bringing an end to fighting that began earlier this year, the BBC reported on Sunday. The changes are related to the Strait of Hormuz and the removal of highly enriched uranium. 

The US employment data for May will be in the spotlight on Friday. Analysts expect the US Nonfarm Payrolls (NFP) to increase by 96K in May, and the US Unemployment Rate is projected to remain steady at 4.3% during the same period. If the report shows stronger-than-expected outcomes, this could support the DXY in the near term.

Traders are now pricing in nearly a 41.2% probability that the Fed will raise interest rates by 25 basis points (bps) by year-end, according to the CME FedWatch tool.