Dollar Takes a Breather After a Two‑Week Upswing
On Monday, the U.S. dollar let go a few points after clinging to gains for the past fortnight. Investors were itching to revisit the trade‑talk drama and the Fed’s next move, so the currency shed some momentum – a bit like someone dropping a heavy sack after a long hike.
Why the Dollar’s Backpedaling
- Central‑bank politics in the spotlight – Treasury Secretary Scott Bessent reportedly tried to steer President Trump away from firing Fed Chair Jerome Powell. If Powell’s streak for “independence” gets hit, that could bite the market.
- Harsh tariffs on the horizon – Commerce Secretary Howard Lutnick confirmed that the hard cut‑off for new tariffs stays August 1. That sticky date keeps trade‑sense traders on edge.
- Rate‑cut optimism – Fed Governor Christopher Waller urged cutting interest rates right after the July meeting, not waiting for newer labor‑market disappearances. That freckle of hope for lower yields keeps bond prices drifting down.
Bond Talk
With the 10‑year Treasury’s yield sliding below 4.39%, the bond market’s recent juggle is getting deeper. While some investors shrug off the risk, the political storm still jostles long‑term returns.
What’s Next?
The whole world is holding its breath for Fed Chair Jerome Powell’s speech tomorrow. A dovish “I’m ready to cut” might slow the dollar and drag yields down, but a cautious “let’s play it safe” could give a quick pick‑up. The answer is all hope and tension.
Stay tuned – the market’s vibe could change faster than a coffee table book flips!
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