The dollar rose on Monday as US President Donald Trump held talks seeking an end to the war in Ukraine, while traders reduced bets on a Federal Reserve interest rate cut in September.
- Trump said a peace deal is achievable while meeting with Ukrainian President Volodymyr Zelensky and European leaders. Speaking to reporters at the White House, the Republican maintained that everyone would prefer an immediate ceasefire, but that he was optimistic that an agreement could be reached to deter aggression in Ukraine.
- Traders will also be watching Fed Chairman Jerome Powell’s appearance later this week at the annual economic policy symposium in Jackson Hole, Wyoming, for further indications of the likelihood of a September rate cut.
- Traders reduced their bets on a rate cut at the next Fed meeting after producer price inflation came in higher than expected in July.
- They had increased their bets on a decline after last month’s consumer price inflation data showed a limited impact from trade tariffs.
- Fed fund futures traders now expect an 83% chance of a September rate cut, after briefly pricing in the full measure last week. Powell is unlikely to set a policy path before the August round of data.
- “I don’t think he can be definitive after being so cautious for so long,” said Lou Brien of DRW Trading in Chicago. “If the labor market weakens, he can act without having to wait for inflation, and that’s historically been the path the Fed has taken. They talk hawkishly about inflation. They react to the labor market.”
- The euro fell 0.31% to $1.1661. Against the yen, the greenback appreciated 0.41% to $147.79.
- The pound sterling fell 0.35% to $1.3504.
Source: Yahoo!Finanzas
