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The US dollar extended its advance, buoyed by optimism surrounding the latest trade developments.
Traders could remain cautious ahead of the upcoming Federal Reserve decision
On the trade front, the recent agreement with the European Union alleviated concerns about tensions between the two partners.
Adding to the optimism, talks with China also resumed in Stockholm, offering tentative signs of progress. Any developments could further boost the currency.
Meanwhile, US Treasury yields held steady as investors digested strong auction results and higher yields, contributing to a firmer tone for the greenback. The 2-year note auction cleared at 3.920%, up from 3.786% previously, while the 5-year note rose to 3.983%.
The market’s focus now shifts to Wednesday’s Fed meeting, where policymakers are widely expected to hold rates steady. Nevertheless, markets will closely monitor the statement and press conference for clues about a possible rate cut in September. The upcoming PCE inflation report, nonfarm payrolls, and Q2 GDP growth rate could also play a crucial role in shaping the Fed’s monetary policy trajectory.
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