Market comment on behalf of Tito Iakopa – Commercial Director at FlowCommunity
The US Dollar rebounded slightly ahead of today’s Federal Reserve interest rate decision. While markets widely expect the Fed to hold rates steady, investors will closely monitor Fed Chair Jerome Powell’s economic projections. His comments on the economic impact of President Donald Trump’s policies may also influence market sentiment in the weeks ahead. A dovish stance could exert selling pressure on the currency, while a more restrictive outlook would likely boost the greenback.
US Treasury yields mirrored the cautious mood, with the 10-year note hovering near 4.3%, unchanged. Higher expectations of rate cuts could weigh on yields, while a hawkish Fed stance may push them higher alongside the dollar. Markets currently anticipate two rate cuts by year-end.
Meanwhile, geopolitical tensions in Eastern Europe and the Middle East could continue to fuel uncertainty and risk aversion. Changing sentiment in this regard could lead to increased market volatility, potentially favoring the US Dollar.