As the week approaches, the US dollar is getting stronger.
This situation is different from the declining performance of the currency king after showing a strengthening last week driven by war tensions between Iran and Israel.
Although it is unclear what announcement by President Donald Trump regarding the two countries agreeing to a ceasefire, the market still reacted positively by showing signs of recovery.
As the war has eased a bit for now, the market's focus has shifted back to the Federal Reserve's (Fed) monetary policy.
On the second day of testimony in Congress, Powell reiterated that the central bank still needs to maintain interest rates while examining the impact of the Trump administration's tariffs on inflation.
If it were not for the tariffs, it is possible that the Fed could implement interest rate cuts earlier.
The current expectation is that interest rate cuts will begin in September with the market expecting 2 cuts.
Apart from expectations for the Fed's policy to shift back to the easing phase, President Trump has reiterated his threat to remove Fed Chairman Jerome Powell.
The Wall Street Journal reported on Thursday that Trump is considering selecting and announcing Powell's replacement in September or October.
Still sticking to the same argument, Trump accused Powell of being too slow to cut interest rates.
In the New York session tonight, the market will be watching the US economic growth report for the first quarter of 2025 for a final reading expected to remain at -0.2%.
