The US dollar was relatively steady on Tuesday, with investors positioning ahead of the Federal Reserve’s annual Jackson Hole symposium later this week.
Chair Jerome Powell is scheduled to speak and could provide fresh signals on the path of interest rates. A more cautious approach could underpin the greenback, while dovish remarks would likely place renewed selling pressure.
US Treasury yields were increasing slightly as interest rate cut bets continued to recede to a certain extent.
Markets price in only two rate cuts by the end of the year, down from three previously. Yields could see more increases if Powell’s tone points to a slower interest rate cut pace.
Beyond monetary policy, attention also turned to a White House summit with European nations, where President Trump discussed security guarantees for Ukraine and outlined possible follow-up meetings. Positive developments could lift investor confidence and benefit riskier assets, weighing on the currency. Conversely, any setback could raise safe-haven demand and bolster the dollar.
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