The US dollar index DXY fell to 102.104.
The likelihood that the Fed will freeze interest rate hikes at the end of the year is rising.
By TradingView
Fed members, including Chairman Jerome Powell, recently paved the red carpet for two 50 basis point rate hikes in the next two meetings, giving the central bank a break to reassess the threat of inflation rooting.
The Fed board supports the idea of pausing rate hikes later this year.
“I have an initial view, and I think a pause in September might make sense,” Bostic, the Fed’s Atlanta chief, noted Monday.
Also, Kansas Fed President Esther George believes that the Fed “should reassess the situation after a 50 basis point increase in June and July.”
The position on aggressive rate increases has changed, and thereby lowered the yield on 2-year Treasury bonds, forcing the dollar to pause in growth.
However, while stability in U.S. interest rate markets “may cause volatility levels to temporarily drop slightly,” ING believes a prolonged reversal of the dollar is unlikely.
The IMG warns that the situation could change after the central bank meets in June.
“All of this could change at the next FOMC meeting on June 15 if dot plots show 3% + rates at the end of year 23. But the FOMC meeting is three weeks away.”
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