Dollar Holds Firm as Markets Await Fed Signals

The US dollar held firm on Tuesday despite recent fluctuations in oil prices, as investors await fresh signals from the Federal Reserve. The greenback gained against several major currencies, including the euro and pound sterling, but lost ground against the yen.

Market expectations for a back-to-back rate hike in October have increased to 58%, with December's move seen as fully priced in. By year-end 2027, the market anticipates a total of 80bps worth of rate increases, according to Fed funds futures.

Investors are eagerly awaiting speeches by Fed Vice Chair Philip Jefferson and New York Fed President John Williams at the US Treasury Market Conference. Both officials have made hawkish comments in recent weeks, with Williams stating that it was unclear whether current policy is sufficient to bring inflation to target.