Dollar Rebounds; Fed Policy Back in Focus
The US dollar index held steady near the 100 level during Tuesday's trading (Aug 4), following a rebound in the previous session. The dollar hovered around 99.99—close to a two-month low—as investors weighed the Federal Reserve's policy trajectory and escalating tensions in the Middle East.
Markets are pricing in a roughly 65% probability that the Fed will raise interest rates by 25 basis points at its September meeting. These expectations follow the central bank's decision to hold rates in the 3.50%–3.75% range during its July meeting, even as inflationary pressures remained above target.
New York Fed President John Williams assessed that current monetary policy remains appropriately positioned. He anticipates inflation will begin to ease in the second half of the year but emphasized that the Fed would not hesitate to raise rates again should price pressures fail to move toward the 2% target.
Investors are now awaiting the JOLTS job openings report and US trade balance data for fresh clues regarding economic strength. The dollar also strengthened against the yen after the US and Japan confirmed joint intervention to support the Japanese currency, though the risk of further action kept USD/JPY movements volatile.
Source: Newsmaker.id
