Dollar Gains Amid Speculation of Federal Reserve Rate Cuts

The U.S. dollar found stability as traders considered potential Federal Reserve rate cuts to support risk appetite amidst U.S. tariffs. A potential rate cut in September is heavily anticipated, leading to currency market fluctuations, including changes in euro, yen, and Swiss franc values.

The U.S. dollar stabilized on Tuesday as traders assessed the possibility of upcoming Federal Reserve rate cuts. This speculation aims to balance the uncertainties created by recent U.S. tariffs. The dollar appreciated by 0.2%, recovering from losses after a lackluster U.S. jobs report last Friday.

Analysts are closely observing whether the dollar can maintain its upward trajectory after its first monthly rise in July. Citi analysts noted uncertainty around U.S. data and asset performance as factors that could disrupt the dollar's standing. Concerns were exacerbated by recent political changes, including dismissals involving top U.S. officials.

As traders anticipate a high probability of rate cuts at the Fed's September meeting, currency markets remain volatile. The dollar's fluctuating value, alongside other major currencies, reflects the global economic impact of trade tensions and market responses to potential shifts in U.S. monetary policy.

(With inputs from agencies.)