Dollar gains ground while the market focuses on new clues – London Business News | Londonlovesbusiness.com

On Tuesday, the US dollar attempted to regain some ground after two sessions of decline.

Concerns about a potential US recession and significant interest rate cuts by the Fed underpinned the dollar’s decline. Traders are anticipating a possible 50 basis point reduction in September, diminishing the dollar’s appeal.

Despite a slight rebound seen in the dollar as better-than-expected US ISM services data and comments by Fed officials eased concerns, looming Fed rate cuts could see downside risks persist for the US dollar.

The 2-year and 10-year US Treasury yields moved away from one-year lows on Tuesday after the latest developments helped allay some of the recession fears that have led to a massive selloff in stock markets and roiled investors. However, yields could remain exposed to volatility as traders react to new inputs.

Looking ahead, market participants could closely watch new economic data, Fed members’ speeches, and the Jackson Hole Economic Symposium this month for further insights into the Fed policy path, which could continue to influence the trajectory of Treasury yields and the greenback.