Yes, a 1.5% foreign transaction fee applies to purchases made at non-US merchants, regardless of the currency charged. This includes transactions where a non-US merchant bills you in US dollars.
When a non-US merchant processes your payment in a currency other than US dollars, Mastercard® International Incorporated will convert the transaction amount to dollars. The exchange rate used is selected by Mastercard® from the range of rates available in wholesale currency markets for the applicable central processing date, which may differ from the rate Mastercard® itself receives or any government-mandated rate in effect for that date.
Note: purchases made at US merchants are not subject to this fee, even if the transaction is processed in a foreign currency.