Market Analysis: If the Federal Reserve (FED) is expected to cut interest rates once this year, the US dollar may strengthen.

Golden Ten Data on June 19, financial website Fxstreet analysis said that the Federal Reserve is widely expected to keep policy unchanged at its fourth consecutive meeting. Currently, there is about a 70% chance that the Fed will choose to cut interest rates for the first time of the year in September. Therefore, the revisions in the dot plot and Powell’s comments may provide key clues as to the timing and frequency of rate cuts. If the revised economic projections show that policymakers still expect a total of 50 basis points of rate cuts this year, the USD could regain selling pressure amid an immediate reaction. Downward revisions to GDP growth and/or inflation expectations could exacerbate the USD sell-off. Conversely, if the dot plot highlights that officials now expect only one rate cut this year, the dollar could strengthen. Investors are now pricing in a 70% probability that the Fed will cut rates at least twice in 2025. This market positioning suggests that the US dollar will have strong bullish potential in the event of a hawkish surprise.