Dutch International: With the market focusing on the Federal Reserve and news from the Middle East, the US dollar may continue to be supported

Chris Turner of the Netherlands International Group stated that as the market focus shifts to the Federal Reserve's meeting, the US dollar may continue to be supported. He wrote that there is no sign of easing in the Middle East conflict, and the market seems to want to see ceasefire news before eliminating the risk premium that supports energy and the dollar. Prior to that, market attention will be focused on the central banks' responses. Turner stated that there is now a risk that US inflation will rise to 3.5% this summer instead of 2.0%, and the Federal Open Market Committee may question the market's pricing for another rate cut this year. The dot plot may also delay the median expectation of a rate cut this year to 2027. Investors are hoping for clear evidence of improvement in the conflict before attempting to assess the peak of the dollar. The DXY US dollar index is currently at 100.28.