USD: The impulse can be built – Ing

The dollar index is on its way to registering a second consecutive week of profits, having risen more than 2% from the minimum of July 1, 96.50. Although it is modest compared to strong losses in the first half of 2025, the dollar has been realized with the fundamental macroeconomic drivers and has significantly restored its positive correlation with yields at 10 years, says Francesco Pesole, FX Analyst of ING.

The Fed could cut rates at the July meeting

“One of our main forecasts this summer is that this return to the ‘functionality’ of the dollar reduces the probability of new collapses – unless Trump dismisses the president of the Fed, Jay Powell (as the brief collapse of the dollar on Wednesday showed) or climbing protectionism beyond the current tolerance of the markets, particularly against China. We do not expect any of the two things, and we still see some support for the dollar in the next month that the 14 basic points differential incorporated in the September September contract is undone. “

“Without Trump’s relentless pressure and the moderate dissent of Christopher Waller and Michelle Bowman, September would probably not be on the table. Yesterday, we listened to Waller to say that the Fed should cut rates at the July meeting due to the weakening of the labor market, while on the side of the data, retail sales were strong and the initial applications of unemployment subsidy continued to cool. Surprise: ICT data showed huge capital tickets of 311 billion dollars in May, after a very modest output of 14,000 million dollars in April.

“Today’s calendar includes some housing figures and surveys at the University of Michigan for June. We will see if inflation expectations have continued to fall: they are currently 5%, although opinions diverge drastically among the Democrats (very high) and Republicans (very low).”