US FX WRAP: Dollar gains as traders no longer fully price one 25bps Fed rate cut in 2026

The recent shift in traders' expectations regarding the Fed’s rate cuts has strengthened the dollar, indicating a more hawkish outlook as the likelihood of a 25bps cut in 2026 is no longer fully priced in. This adjustment could influence cross-asset correlations, especially with currencies like the Euro and Yen, potentially bringing upward pressure on the dollar and impacting risk sentiment in equities and commodities.