The dollar index hovered around 97.8 on Wednesday, holding near levels reached in the previous session as expectations grew that the Federal Reserve will keep interest rates unchanged for an extended period. Fed official Susan Collins said it is likely appropriate to maintain current rates, citing an improving labor market alongside persistent inflation risks, while Thomas Barkin remarked that monetary policy is well positioned to manage risks surrounding the economic outlook.
Even so, markets continue to price in roughly three 25-basis-point rate cuts from the Fed this year. At the same time, the United States on Tuesday began implementing a temporary 10% global tariff, which the White House is reportedly seeking to raise to 15%, following last week’s Supreme Court decision striking down Donald Trump’s reciprocal tariffs. Geopolitical tensions also weighed on sentiment, with investors watching the third round of US–Iran nuclear talks, scheduled to take place in Geneva on Thursday.
