Here’s what other market participants are saying:
Dollar Catalyst (BNP Paribas)
Powell’s testimony “is a good potential catalyst for a resumption of the USD weakness we saw last month,” analysts including Shahid Ladha said.
Flatter Curve (DBS Bank)
Treasury yield curve may flatten ahead of Fed’s July meeting as markets are already more than fully priced for an “insurance” rate cut. “I’m biased toward some flattening” in the 2-10 year part of the U.S. yield curve, said Eugene Leow, rates strategist in Singapore.
Greenback Winner (State Street)
The dollar could climb even after the Fed cuts as investors may start to cover underweight positions. “All the roads point to one result: that the dollar could possibly be the sole winner,” said Bart Wakabayashi, branch manager in Tokyo.
Avoiding Panic (Commerzbank)
“A 50bps cut would smack a bit too much of panic,” said Bernd Weidensteiner, economist in Frankfurt. “After the release of a rather strong employment report on Friday, a large step is unlikely.”
Dollar Gain (RBC Capital Markets)