Market participants remain confident that the Fed has delivered the final rate hike in their tightening cycle overnight when the policy rate was raised by 0.25 point.

If inflation continues to slow in the coming months, we expect the Fed to signal a pause to their hiking cycle at either the Jackson Hole symposium towards the end of August or at the September FOMC meeting.

The developments do not alter our outlook for the US Dollar to weaken further this year. The risk of a more hawkish Fed policy update has now passed leaving it vulnerable to further weakness.