Analysts cite hawkish Fed dissent and centrist leanings as key drivers for near-term Dollar strength despite recent weakness.
Recent US Dollar weakness following the July FOMC meeting is viewed as a temporary retracement rather than a structural downtrend, according to macro strategists. The firm highlights three hawkish dissents at the July FOMC in favor of a rate hike as a key factor supporting the Dollar’s broader uptrend into Q3 2026.
The team notes that while their MRSI model has turned more bearish, it has not signaled a sustained USD decline. Hawkish speeches from Fed dissenters and centrist members are expected to offset post-FOMC Dollar softness, curbing further weakness in the near term.
In the absence of significant US data deterioration, the firm sees the Q3 2026 USD uptrend remaining intact. Strategists suggest positioning for near-term consolidation or uptrend resumption by shorting out-of-money EUR/USD calls.