FX.co ★ Dollar Steadies Ahead of Fed Meeting

The dollar index stabilized around 97.3 on Tuesday, hovering near its lowest level in over two months as the Federal Reserve commences its two-day policy meeting today. The market has nearly fully factored in a 25 basis point rate cut for this week, with a cumulative 67 basis points of easing anticipated by the end of the year. These expectations have been strengthened by recent data indicating a cooling labor market and persistent low inflation, even amidst imposed tariffs. Additionally, President Donald Trump has pushed Fed Chair Jerome Powell for a more substantial rate cut, pointing to weaknesses in the housing sector as justification. On the economic data front, investors’ attention will be focused on indicators such as retail sales, import prices, housing statistics, and business inventories due for release later today. Regarding trade, President Trump remarked on Monday that negotiations between the US and China were advancing positively in Spain, with a scheduled discussion between Trump and Chinese President Xi Jinping on Friday to finalize the terms.