"The currency could continue to consolidate as traders could remain cautious ahead of the Federal Reserve meeting, while they await the central bank's monetary policy decision. The market could remain exposed to downside risks as interest cut expectations remain high. Futures markets now assign roughly an 87% probability that the Fed could deliver a 25 bps cut at this week's meeting, as well as additional cuts in 2026."
"However, Fed Chair Jerome Powell's press conference and accompanying statement could be critical and could affect sentiment. Over the near term, the dollar's direction could hinge on the tone of the Fed Chair and the economic projections of the central bank. A clearly dovish message could push the dollar to the downside, extending its downtrend, while a cautious stance or resistance to further easing could spark a corrective bounce in the greenback."
The US dollar remained relatively stable, with the Dollar Index hovering near the 99-point level. Traders may keep positions consolidated ahead of the Federal Reserve meeting as they await the central bank's monetary policy decision. Market exposure to downside risks is elevated because interest-cut expectations are high. Futures markets price roughly an 87% probability of a 25 basis-point cut at this week's meeting and additional cuts in 2026. Fed Chair Jerome Powell's press conference and the accompanying statement could significantly sway sentiment. A dovish message would likely push the dollar lower, while a cautious or resistant stance could trigger a corrective bounce.
Read at London Business News | Londonlovesbusiness.com
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