The dollar rose against major currencies after Powell’s rate cut remarks, with the dollar index up 0.49% at 98.32. Forecasters anticipate a 25-basis-point Fed rate cut in September due to rising job market risks. Traders are hedging against a potential hold on rates, leading to a U.S. dollar recovery.

Traders foresee an 84.3% chance of a September rate cut, down slightly from previous sessions but higher than a month ago. The dollar has weakened by 9% this year, with the euro gaining over 12%. Analysts expect the euro to strengthen to $1.20-$1.22 in the next six-to-12 months.

Euro zone bond yields rose as traders reassessed the Fed’s impact on Europe and analyzed data showing increased German business morale. Germany’s 10-year bond yield rose 3.9 basis points to 2.758%. U.S. Treasury yields were slightly higher, with the two-year Treasury yield up 4 basis points at 3.728%.

Investors are monitoring Trump’s criticism of Powell, questioning the Fed’s independence. White House adviser Hassett stated that replacing Powell could take months. Goldman Sachs analysts noted that reshaping the Fed poses a challenge to longer maturities. The 30-year U.S. Treasury yield inched up to 4.8836%.

Upcoming data releases, including the PCE price index and August payrolls figures, could impact the Fed’s policy path. Analysts are closely watching these indicators to gauge future rate decisions. The market continues to react to Powell’s comments and Trump’s influence on the central bank.

Read more at Yahoo Finance: Dollar rebounds from slump spurred by Powell’s dovish surprise