Reduced expectations for a September Fed rate hike and attractive USD carry trades support the dollar’s near-term stability.
The US Dollar remains rangebound as softer US economic data lowers the likelihood of a September Federal Reserve rate hike. Attractive carry trades continue to support the greenback, though markets await clarity from the upcoming July FOMC minutes.
Recent labor market and inflation data have eased concerns about aggressive Fed tightening, reducing the odds of further rate increases. Long-end US yields, if stable, should sustain support for risk assets and carry trades.
Investors will scrutinize the July FOMC minutes for insights into policymakers’ inflation views and rate intentions. While recent data has shifted expectations, the minutes may still influence near-term market sentiment.