Kieran Williams of InTouch Capital Markets noted that “even the perception of political interference could erode long-term trust in the Fed and shift global dollar positioning.”
Cautious Fed Tone and Dovish Bets Add Pressure
Fed Chair Jerome Powell maintained a cautious stance on Wednesday, citing the uncertain inflationary impact of proposed tariffs. While calling for vigilance, Powell stopped short of signaling immediate easing.
Still, traders are betting on cuts. The CME FedWatch Tool now shows a 25% probability of a July rate cut, up from 12% last week, intensifying downward pressure on the dollar.
Upcoming US Data in Focus
Traders await key releases, including Q1 GDP, Durable Goods Orders, Chicago PMI, and Jobless Claims. Strong prints could stabilize the dollar, but soft data may accelerate its slide.
