US Dollar Strength at Risk Ahead of Fed Meeting

The US Dollar (USD) has retained its bullish outlook ahead of tomorrow's Federal Reserve (Fed) meeting, but there are concerns that the rate hike odds priced in may not remain after the event.

Newly installed Fed Chair Kevin Warsh is expected to take a hawkish approach, which could expose President Trump's choice in the nomination process if he pushes for higher interest rates despite relative weakness in stocks.

The CME Fedwatch Rate Probabilities indicate a near 90% chance of at least one rate hike by the end of the year and a 50% chance of two hikes, which would contradict President Trump's desire for rate cuts ahead of the November election.