On Wednesday, the US dollar dropped significantly due to the Federal Reserve’s dovish remarks and some uncertainty surrounding potential tariffs. Volatile market movements were seen across various assets with oil prices falling nearly 2% after an initial 1% rise influenced by positive comments from President Trump about a highly productive Witkoff–Putin meeting.
Though concerns lingered due to increased tariffs on India and warnings against Europe buying Indian oil. Fed Governor Lisa Cook and Minneapolis Fed President Neil Kashkari suggested a shift in policy, with expectations of two rate cuts by year-end prompted by July’s jobs data, which one major bank called a wake-up call for a possible September cut.
The Swiss franc weakened after failed tariff relief talks, while the euro gained as expectations of a Fed rate cut grew. The dollar index fell below its 50-day moving average, signaling a continued downtrend, potentially worsened by the choice of President Trump’s Fed pick.
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