The dollar is trying to recover ahead of the statements from the Federal Reserve Governor Powell!

The US Dollar Index managed to register a slight increase during trading on Wednesday, trying to recover from losses in the previous session. This comes amid widespread anticipation for the statements of Federal Reserve Chairman Jerome Powell, expected later today, which could be crucial in directing the dollar's course in the upcoming period.

Here are the main factors affecting the dollar movements today:

Rising US Treasury Yields Support Dollar Strength

US Treasury yields have seen a notable rise across various maturities, which has bolstered the dollar and supported it as a preferred investment choice. The yield on the 10-year Treasury note increased by 1.00% to reach 4.265%. The yield on 20-year bonds rose by 0.86% to hit 4.527%, while the long-term 30-year bonds recorded an increase of 0.92%, settling at a yield of 4.433%. This improvement in yields has pushed investors toward the dollar.

Market Optimism Regarding Trump's Economic Policies

Market expectations regarding the policies of elected President Trump have enhanced the performance of the dollar. According to reports from Goldman Sachs, the anticipated policies, such as raising tariffs and tax cuts, are expected to provide significant support to the US Dollar Index in the long term. Although initial fluctuations in financial markets may occur, experts believe that the long-term effects of these policies could provide the US currency with additional positive momentum.

Pressure from Interest Rate Cut Expectations on the Dollar

Conversely, the dollar faced some pressures due to increasing expectations of US interest rate cuts. Data indicated that the likelihood of the Federal Reserve cutting interest rates by 25 basis points at its next meeting was about 74.0%, while the likelihood of keeping rates unchanged was estimated at 26.0%. These expectations negatively impacted the dollar's gains, limiting its strength during today's trades.

Dollar Index Performance and Anticipation of Powell's Remarks

Amid these developments, the US Dollar Index rose by 0.20% to reach 106.54 points. Investors are awaiting Jerome Powell's statements later today, in addition to the anticipated US employment data at the end of the week, which could be decisive in determining the dollar's trajectory in the coming period.

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