Investors trim USD positions before the Fed’s policy announcement, with a 40% chance of a 25-basis-point hike priced in.
The US Dollar Index (DXY) dips 0.1% to 101.40 as traders reduce exposure ahead of the Federal Reserve’s July decision. Markets remain cautious, with nearly 40% odds of a 25-basis-point rate increase despite expectations for the fed funds rate to hold at 3.50%–3.75%.
Weaker US Consumer Confidence data adds pressure, though the Greenback stays near recent highs. Focus shifts to the Fed’s statement and Chair Jerome Powell’s press conference for clues on a potential September move.
EUR/USD rises 0.2% to 1.1390, while GBP/USD holds near 1.3290. USD/JPY climbs toward 163.84, supported by elevated Treasury yields and hawkish Fed expectations.