A sharp recovery in US Dollar triggered by cautious market sentiment.
Bets for interest rate cut at the September Fed meeting continue to receive pressure from Fed officials.
US Treasury yields also fuel recovery in USD with 2-year yield rising to 5.00%.
The US Dollar Index (DXY) is showing a sharp recovery, hovering around the 105.00 mark on Wednesday. Amid this climate, investors remain risk-averse. As Federal Reserve (Fed) officials’ continuous asking for patience has resulted in reduced bets on a rate cut for the upcoming September Federal Open Market Committee (FOMC) session. As a reaction, US Treasury yields recovered.
As the US economy remains strong, the likelihood of cuts in June and July remains low, with markets keenly looking forward to data that would aid in placing bets for the September meeting. The Wednesday session should see subsequent highlights in the form of the Fed's Beige Book report.
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