The US Dollar is gaining strength ahead of the Federal Reserve’s decision to likely hold interest rates at 3.75 percent, with a slim chance of a cut today and expectations for the first cut in June. Rick Rieder, BlackRock’s CIO of Global Fixed Income, is the leading candidate to succeed Jerome Powell as Fed Chair, potentially signaling a more dovish policy approach. The Euro has dipped against the Dollar after its largest single-day move since COVID, though it remains at its strongest level since 2021, with the ECB closely monitoring its impact on inflation and a mid-year rate cut now twice as likely. Meanwhile, the Australian Dollar has weakened following higher-than-expected inflation data, increasing the probability of a Reserve Bank of Australia rate hike next week to nearly 69 percent.
