Dollar flat on Fed rate cut bets, Iran tensions

The US dollar was flat on Friday, July 17, 2026, but ended the week lower as tame US inflation data led traders to cut bets on imminent rate hikes from the United States — Federal Reserve. Iran and the United States exchanged intensifying fire in a week-long escalation that largely unraveled last month's truce, spurring safe-haven bids for the dollar and pushing oil prices to near one-month highs. The tech-led global equity market plunge and ongoing disruption to Strait of Hormuz traffic triggered a flight to safety. US consumer sentiment climbed to a five-month high in July, although traders said the respite may prove temporary with renewed conflict in the Middle East driving up gasoline prices. The euro was flat at $1.1437, sterling fell 0.23% to $1.3449, and the Australia — Australian dollar was 0.24% softer at $0.6979. The Japan — Japanese yen was flat at 162.35 per dollar, near its 40-year low, with traders wary of official intervention from Tokyo after Finance Minister Satsuki Katayama reiterated the government's readiness to take decisive action. US retail sales rose slightly in June, but online spending surged, prompting economists to upgrade second-quarter growth estimates. The United States — Federal Reserve is expected to keep interest rates unchanged later this month after consumer price inflation cooled in June. Chances for a Fed hike in July stood at 10-14%, down from 25% the previous week.