USD Strengthens as Markets Seek Protection from Hawkish Surprises
The US dollar may gain from pre-FOMC positioning, as markets hold onto dollars as protection against hawkish surprises.
Oil prices have fallen sharply due to a pause in fighting with the US, but downside risks remain unless a clear de-escalation path emerges.
The Federal Reserve is expected to keep interest rates on hold this week, with markets pricing 8bp for this meeting and 41bp by year-end.