USD strengthens as market prices in 38 bps of tightening by year-end
The US dollar continues to be supported following the hawkish Fed dot plot last week.
The central bank’s tightening bias led to a hawkish repricing in interest rate expectations, with the market now pricing in 38 bps of tightening by year-end.
The economic data and financial markets will guide the Fed, with a 32% chance of a hike already in July and 68% probability of a move in September.
The EUR/USD broke through a key support zone as the ECB maintains its tightening bias, but the greenback’s strength is expected to continue until the next set of economic data.