US Dollar Surges on Trump's Neutral Comments
The US Dollar has started the week on a strong note, driven by neutral comments from President Donald Trump regarding interest rate cuts.
Fed rate expectations have increased due to higher-than-expected US monthly CPI data, with analysts at MUFG/BTMU now pricing an 88% probability of a hike in September and a terminal rate in 2027 of 4.53%.
The absence of demand for interest rate cuts from President Trump has improved the Fed's credibility, which was hurt by his previous criticism of former Fed Chairman Jerome Powell.