Dollar Dominance: U.S. Fiscal Strategies Shape Global Markets

The U.S. dollar is approaching a two-year high amid strong economic data and decreased expectations for U.S. rate cuts in 2025. This strengthens Treasury yields, affecting the euro, pound, and other currencies. Scott Bessent’s upcoming Treasury Secretary hearing may impact fiscal policies, with tariffs as a key tool.

The U.S. dollar held near its highest point in over two years, influenced by robust economic stats and recalibrated expectations for U.S. interest rate cuts in 2025. The move has strengthened Treasury yields and pressured major currencies like the euro, pound, and yen.

Attention turns to Scott Bessent's nomination hearing for U.S. Treasury Secretary, where his stance on currency policies, tariffs, and fiscal outlook could become pivotal. His expected strategies may mitigate potential inflationary impacts of U.S. economic policies.

Investor focus remains on U.S. inflation data following a strong jobs report. Market movements indicate less confidence in significant Fed rate cuts this year, contrasted with the dollar's persistent strength bolstered by cautious monetary policy.

(With inputs from agencies.)