Dollar Steadies as Markets Assess Fed Outlook

2026-08-04 02:03 By Jam Kaimo Samonte 1 min. read

The dollar index hovered near 100 on Tuesday after rebounding in the previous session, as investors continued to evaluate the outlook for Federal Reserve monetary policy amid ongoing uncertainty in the Middle East.

Markets are currently pricing in about a 65% chance of a 25 basis point Fed rate hike in September after the central bank left interest rates unchanged in July.

Bank of New York Fed President John Williams monetary policy remains well positioned, adding that inflation is expected to ease during the second half of the year.

Investors are now awaiting the latest JOLTS job openings report and international trade data due later today for further insight into the strength of the US economy.

Elsewhere, the dollar regained some ground against the yen after the US and Japan confirmed coordinated efforts to support the Japanese currency, though the possibility of additional interventions continues to keep markets on edge.



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Dollar Steadies as Markets Assess Fed Outlook
The dollar index hovered near 100 on Tuesday after rebounding in the previous session, as investors continued to evaluate the outlook for Federal Reserve monetary policy amid ongoing uncertainty in the Middle East. Markets are currently pricing in about a 65% chance of a 25 basis point Fed rate hike in September after the central bank left interest rates unchanged in July. Bank of New York Fed President John Williams monetary policy remains well positioned, adding that inflation is expected to ease during the second half of the year. Investors are now awaiting the latest JOLTS job openings report and international trade data due later today for further insight into the strength of the US economy. Elsewhere, the dollar regained some ground against the yen after the US and Japan confirmed coordinated efforts to support the Japanese currency, though the possibility of additional interventions continues to keep markets on edge.
2026-08-04
US Dollar Extends Decline
The dollar index fell to 99.8 at the start of August, the lowest in seven weeks amid fresh strength from the yen, while foreign investors maintained their partial pivot out of dollar positions from last week. The Japanese yen extended its surge after the US Treasury bought more of the Japanese currency with its large euro holdings, magnifying the initial yen rebound when Tokyo intervened in the currency market. The developments added to the dollar's slide following the Federal Reserve's last meeting. The US central bank maintained its rates unchanged, as expected. However, Fed Chairman Warsh signaled some reluctance to confirm that a rate hike would be his preferred reaction to higher inflation, leading foreign markets to trim holdings of dollar-denominated assets. Still, rate futures show that over half of the market is positioned for Fed hike in September.
2026-08-03
Dollar Weakens on Yen Intervention
The dollar index fell toward 99.5 on Monday, extending its decline to a fifth consecutive session after Japan confirmed it had carried out coordinated yen-buying operations with the US, while Bank of Japan data indicated the country may have spent as much as $58.97 billion on Thursday. Japanese authorities also warned they stand ready to conduct additional coordinated interventions if necessary, noting they remain in close contact with their US counterparts. In the US, investors are turning their attention to a full slate of labor market data this week, highlighted by Friday's closely watched monthly jobs report. Last week, the Federal Reserve left interest rates unchanged, although three officials dissented, warning that waiting too long to act could eventually require more aggressive policy tightening. Markets are currently pricing in about a 68% chance of a 25 basis point Fed rate hike in September.
2026-08-03