Dollar Bullish Sentiment Peaks as Traders Adjust Fed Rate Cut Bets

According to BlockBeats, foreign exchange options indicate that bullish sentiment on the dollar has reached a three-week high. This suggests that traders are betting U.S. Federal Reserve Chair Jerome Powell will not adopt an overly dovish stance on rate cuts. Recently, traders have been reducing their bets on rate cuts. The market now anticipates a cumulative rate cut of 47 basis points by the end of the year, down from 63 basis points just over a week ago. Sonja Marten, Head of FX and Monetary Policy Research at DZ Bank AG, stated in an interview with Bloomberg Television, "The door for a 25 basis point rate cut in September is open, but I don't think he will take a more aggressive stance than that." Additionally, according to CME's FedWatch tool, there is currently a 24.5% probability that the Federal Reserve will keep rates unchanged in September, with a 75.5% chance of a 25 basis point cut. For October, the probability of maintaining rates is 13%, with a 51.5% chance of a cumulative 25 basis point cut and a 35.5% chance of a cumulative 50 basis point cut.