Dollar Holds Steady While Traders Catch Their Breath
On Friday the U.S. dollar stayed roughly where it was, giving markets a breather as they sifted through the latest trade headlines and lined up their expectations for next week’s Federal Reserve showdown.
Trade Talks Keep the Priceroom Warm
What’s tickling the curve? Positive developments in trade negotiations. Rumors swirl that U.S. and EU negotiators are on the brink of locking in a 15% baseline tariff on the bulk of European goods – a move that mirrors what’s already in play with Japan.
- • Clear path to a deal means fewer jitters for the dollar.
- • Talks with China are slated to restart in Stockholm next week.
- • The overall tone signals reduced risk for immediate downside.
Fed’s Pause: The Conversation Starters
The stakes go beyond trade. Most analysts alike see the Fed keeping rates steady for the next meeting – but the real buzz is around Chair Jerome Powell’s post‑meeting remarks. Those words might hint at whether the Fed’s tightening will fade or stay sharp.
Right now, markets are pricing in two potential rate cuts by the end of the year, penciled in for September and December.
Treasury Yields: Watch Their Tango
Rates up a bit as expectations of cuts waver. A cooler-than-expected 25‑year jobless claims report gave the Fed some breathing room. Yields will hold their stride if the trade room stays calm and Fed signals stay steady. A timid stance could lift yields (and the dollar), while a more cautious tone might keep them anchored.
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