The market is betting that Powell will maintain a hawkish stance, and the bullish sentiment on the US dollar has risen to a three-week high

The bullish sentiment regarding the US dollar has surged to a three-week high, as markets predict that Federal Reserve Chair Powell will uphold a hawkish interest rate policy. This positive outlook is supported by traders’ actions.

Despite expectations for a potential 25 basis point cut in September, Deutsche Bank’s Sonja Marten emphasizes that Powell is likely to avoid aggressive moves. Meanwhile, Monex Europe’s Nick Rees warns that overinterpretation of Powell’s comments may result in a dollar sell-off.