Dollar Edges Higher as Iran Halts Talks, Geopolitical Jitters Boost Safe-Haven Demand; DXY Rises 0.3%

The U.S. dollar strengthened on June 1, 2026, after Iran suspended indirect nuclear negotiations with Washington, reigniting safe-haven flows amid Middle East turmoil. The dollar index (DXY) rose 0.3% to 99.20. Iran’s semi-official Tasnim news agency cited U.S. airstrikes and Israeli military operations in Lebanon as reasons for pausing talks and threatened to block the Strait of Hormuz. President Trump later said he had not received official notice and claimed negotiations were “moving along rapidly,” while adding Israel would not attack Beirut. The mixed signals limited deeper dollar gains. The DXY gained 0.9% in May, supported by expectations the Federal Reserve will keep rates elevated. The dollar rose 0.3% to 159.66 yen, hovering just below the 160 threshold that could trigger Japanese intervention. The ISM manufacturing PMI hit a four-year high of 54, underscoring a resilient economy that lets the Fed prioritize inflation control.