US Dollar: Hawkish Fed pricing supports USD – BBH

FXStreet Insights Team FXStreet

Brown Brothers Harriman’s (BBH) Elias Haddad notes the US labor market is stabilizing and inflation is gaining traction, with ISM surveys and the Fed Beige Book reinforcing this view. Haddad highlights that a 25 bps Fed funds rate hike to 3.75-4.00% by year-end is now heavily priced and supportive for the Dollar, while upcoming Revelio Labs employment data will be watched for confirmation.

Fed pricing underpins stronger Dollar

"The Fed Beige Book reinforced the case that the US labor market is stabilizing and inflation is gaining traction. According to the Beige Book “Employment showed little to no change across eleven Districts, while one District experienced modest growth…Prices increased at a moderate to strong pace overall, with most Districts reporting higher inflation than the previous report.”"

"The ISM May surveys corroborated the Beige Book’s findings. The Prices Paid indices signaled inflation risks remain skewed to the upside while the Employment gauge was stable under the 50.0 boom/bust threshold."

"A Fed funds 25bps rate hike by year-end to a target range of 3.75-4.00% is increasingly likely (75% priced-in) and supportive of a firmer USD."

"Dallas Fed president Lorie Logan (FOMC voter) said yesterday, “I'm increasingly concerned that higher interest rates could be necessary later this year to fully restore price stability.” Logan was one of the three regional Fed presidents (the other two are Beth Hammack and Neel Kashkari) that did not support the inclusion of an easing bias in the April 29 post-meeting statement."

"Fed speakers today include: Richmond Fed President Tom Barkin (2027 voter), Fed Vice Chair for Supervision Michelle Bowman, San Francisco Fed President Mary Daly (2027 voter), and Kansas City Fed President Jeff Schmid (non-voter)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD eyes 0.7150 barrier nine-day EMA

AUD/USD inches higher after registering modest losses in the previous day, trading around 0.7130 during the Asian hours. The technical analysis of the daily chart indicates that the pair is moving sideways within the rectangle pattern, suggesting a consolidation as neither the bulls nor the bears have enough momentum to take control of the market.

USD/JPY trades below 160.00 intervention threshold; bullish bias intact

The USD/JPY pair attracts some sellers during the Asian session amid fears that authorities will step in again to prop up the Japanese Yen. Furthermore, the Israel-Lebanon truce prompts some profit-taking around the US Dollar and exerts downward pressure on the currency pair.

Gold defends 200-day SMA, rises toward $4,500

Gold is attempting a tepid recovery toward $4,500 on Thursday, as renewed optimism in the Mideast geopolitical front calms market nerves. This cautious optimism across Asian markets weighs on Oil prices, and diminishes the US Dollar’s safe-haven appeal, helping Gold stage a decent comeback from the weekly low of $4,424.

Hyperliquid: ETF demand, capital rotation fuel HYPE rally as Bitcoin melts

Hyperliquid price sustains an upward trend near its all-time high of $75.76 on Thursday after posting 80% gains in May, while Bitcoin (BTC) retraces below $65,000, triggering a market-wide panic.

Kevin Warsh takes the Fed helm: What it means for the US Dollar

The Federal Reserve moves away from the highly predictable "forward guidance" model of the Jerome Powell era to a new “Kevin Warsh environment”, characterized by less communication, more policy surprises, and an increased focus on the Fed's complex balance sheet.

Recession on paper: What really moves the Canadian Loonie now?

Statistics Canada handed the headline writers a gift and the analysts a headache. Real GDP shrank 0.1% on an annualized basis in the first quarter, and with the fourth quarter of 2025 revised down to a 1.0% contraction, that is two negative quarters in a row, the textbook definition of a technical recession and Canada's first since the pandemic.