TechFlow, August 22 — According to Jinshi Data, currency options show bullish sentiment for the dollar has risen to its highest level in three weeks, as traders bet that Powell will not take an overly dovish stance on interest rate cuts. "The possibility of a 25-basis-point rate cut in September will be retained," said Sonja Marten, Head of Foreign Exchange and Monetary Policy Research at Deutsche Bank, "but I don't think he will go more aggressively than that." Marten said Powell is likely to resist pressure for rate cuts from Trump, and will "be very clear that he won't follow a path potentially unsupported by fundamentals due to pressure from the White House." Nick Rees, Head of Macro Research at Monex Europe, said if markets "overreact" to any comments from Powell hinting at a possible rate cut in September, it could trigger initial dollar selling, though this might be short-lived. "Overall, we expect the tone to lean hawkish, which would drive the dollar stronger further before the end of this week."
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