 Wednesday brought a lull in FX volatility as Dollar’s selloff eased, though it remained broadly under pressure for the week. The geopolitical backdrop is calmer, with the Israel-Iran ceasefire appearing stable for now. Trade talks seemed to be on hold, and with no major data releases on deck, markets are drifting into the second half of the week awaiting fresh signals. Fed Chair Jerome Powell’s second day of testimony will garner attention, but few expect new revelations. His message Tuesday emphasized policy caution amid tariff uncertainty, and reiterated that inflation must remain anchored to support labor market strength. The path of interest rates remains clouded by unanswered questions on how deeply and persistently tariffs will feed into prices. Following dovish signals from Vice Chair Bowman and Governor Waller, markets briefly speculated on a possible July rate cut. But a series of pushbacks from other Fed officials has brought expectations back to earth. The probability of a July cut has cooled to around 20%, with traders now placing 85% odds on a move in September—still contingent on upcoming data, particularly next week’s June non-farm payrolls. Currency markets reflect this recalibration. Dollar remains weak but has edged off its lows, now the second-worst performer of the week after Loonie. Yen is not far behind as the third worst. Swiss Franc continues to lead, followed by the Pound and Kiwi. Euro and Aussie are holding in the middle of the pack..... | 
