Analyst Francesco Pesole from ING Groep stated that due to the high short-term overnight index swap (OIS) rates, the USD continues to rise against the trend.

Pesole noted that the market generally expects the Federal Reserve to cut rates by 25 basis points this week, but this may indicate that the Federal Reserve will be cautious about rate cuts in the future, as anticipated by the market.

Pesole remarked that unless the Federal Reserve reveals more signals for rate cuts than what the market pricing includes, the current 2-year USD overnight index swap rate of about 4.0% should prevent the dollar from significantly declining in typically weak months.

The DXY USD Index rose by 0.1% to 107.007 points.