Dollar Strengthens as Market Expects Higher Fed Rates

The US dollar's upward trajectory is expected to continue due to market expectations for Federal Reserve policy, according to analysts at ING.

This is driven by speculation around the Fed's next moves on interest rates, with traders pricing in a slower pace of rate cuts than previously anticipated.

ING's analysis points to a combination of factors keeping the dollar bid, including its safe-haven appeal amid global uncertainty and uneven growth in other major economies.

The bank's currency strategists see limited downside for the dollar in the immediate term, arguing that the market is not yet fully pricing in the possibility of the Fed holding rates steady for an extended period.