Scotiabank strategists Shaun Osborne and Eric Theoret note the US Dollar (USD) is narrowly mixed to softer ahead of the Federal Open Market Committee (FOMC), with swaps pricing a modest chance of a hike but the bank seeing that risk as much lower.

The Dow Jones Industrial Average trades just above 51,800 on Wednesday afternoon, down roughly 900 points and 1.7% from Tuesday's close. The session high just above 52,800 printed before 09:00 GMT, and the tape has sold in one near-continuous line ever since.

BNY’s Geoff Yu notes that USD exposure is elevated across global portfolios, with strong buying in both equities and bonds generating sizeable rebalancing signals. The bank recommends increasing FX hedges instead of selling U.S. assets, as hedge ratios remain low and Dollar allocations high.

BNY’s Geoff Yu notes the US Dollar (USD) enters the Federal Open Market Committee (FOMC) with strong recent demand but stretched positioning, as cross-border buying and late-July spot demand remain supportive.

ING strategists Francesco Pesole and Frantisek Taborsky expect the Federal Reserve to keep rates unchanged, with two dissenters possibly voting for a hike, limiting downside in front-end USD rates.

The US Dollar (USD) stands at a critical juncture as financial markets prepare for the Federal Open Market Committee's (FOMC) upcoming interest rate announcement.

Dow Jones futures gain 0.11% to trade around 53,000 during European trading hours on Wednesday. Meanwhile, S&P 500 futures rise 0.16% to trade near 7,480, though Nasdaq 100 futures decline 0.17%, trading near 27,870, respectively.

Geoff Yu at BNY reports that global equity allocations have reached a record share of portfolios, with United States (US) markets dominating both equity and fixed-income holdings.

The US Dollar (USD) trades marginally lower in the European trade on Wednesday, reflecting caution ahead of the Federal Reserve’s (Fed) monetary policy announcement at 18:00 GMT.

MUFG’s Lloyd Chan expects the Federal Open Market Committee (FOMC) to deliver a hawkish hold, with the Federal Reserve (Fed) keeping rates unchanged while stressing elevated inflation risks. He notes softer recent US data but highlights that markets still price some probability of a July hike.

The United States Dollar Index (DXY), which tracks the Greenback against a basket of currencies, is seen consolidating below the 101.50 level during the Asian session as traders await the outcome of a two-day FOMC meeting, due later this Wednesday.

The Dow Jones Industrial Average trades just short of 52,900 on Tuesday, higher by close to 700 points and 1.3%, roughly 450 points beneath the record it set in the first week of July. Taken alone, that reads as a broad risk rally.

The Greenback, when tracked by the US Dollar Index (DXY), abandons the area of monthly peaks and recedes toward the 101.30 zone on turnaround Tuesday.

MUFG’s Lee Hardman notes the US Dollar (USD) has reversed early-week losses and is trading near year-to-date highs ahead of tomorrow’s Federal Open Market Committee (FOMC) meeting.

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is losing ground after three days of gains and trading around 101.50 during the Asian session on Tuesday.

On Monday, US President Donald Trump grabbed the headlines as investors awaited monetary policy meetings by three of the eight major central banks, led by the Federal Reserve, the Bank of England, and the Bank of Japan.

The Dow Jones Industrial Average trades near 52,200, up around 250 points, after a session that handed it the month's cleanest bullish catalyst and then took most of it back.

BNY’s Geoff Yu says softer June Consumer Price Index (CPI) has reduced immediate inflation concerns, but limited Fed guidance continues to support policy uncertainty and US Dollar (USD).

MUFG’s Lee Hardman notes the US Dollar has softened as Middle East tensions ease and Brent Oil retreats below USD90, reducing energy-driven inflation fears. The correction in energy prices has slightly lowered market-implied odds of a near-term Fed rate hike.

Brown Brothers Harriman’s (BBH) Elias Haddad expects a hawkish Federal Reserve (Fed) hold and a goldilocks-like United States (US) macro backdrop to keep the US Dollar (USD) supported in coming days.

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is losing ground after posting minor losses in the previous trading day, trading around 101.20 during the Asian session on Monday.

The index that spent this week absorbing a war premium trades near 52,000 on Friday, around 325 points to the good side, on the strength of a wire report that its own three sources undercut in the same breath.

Scotiabank strategists Shaun Osborne and Eric Theoret say broad US Dollar (USD) gains are moderating as United States (US) yields retreat and risk appetite improves after a tech-led selloff.

MUFG’s Derek Halpenny highlights that rising US and global bond yields, elevated geopolitical risks and higher energy prices are supporting the US Dollar.

ING’s Chris Turner notes the US Dollar (USD) is supported as higher energy prices fuel expectations of further central bank tightening, with markets pricing more hikes from the European Central Bank (ECB) and Bank of England (BoE).

The US Dollar Index (DXY), which tracks the Greenback against a basket of currencies, drifts lower during the early European session on Friday and erodes a part of the previous day's strong gains back closer to the monthly high.

Dow Jones futures gain 0.35% to trade around 52,070 during European trading hours on Friday. Meanwhile, S&P 500 futures and Nasdaq 100 futures advance 0.21% and 0.08%, trading near 7,460 and 28,650, respectively.

Lloyd Chan at MUFG notes that US rate expectations remain volatile, with markets now pricing further Federal Reserve (Fed) tightening this year. Rising Treasury yields have pushed the US Dollar (USD) higher, lifting the US Dollar Index (DXY).

The US Dollar (USD) clings to the previous day’s gains in the Asian session on Friday, as surging oil prices due to intensified Middle East energy supply risks have revived Federal Reserve (Fed) interest rate hike expectations.

Here is what you need to know for Friday, July 24: