The dollar can start moving before the Fed gives traders anything official to react to.
A hot inflation print can be enough. So can a weak jobs report, a jump in Treasury yields, or one sentence from a Fed official. None of those things changes the policy rate on the spot, but they can change what traders think the next few meetings will look like.
That is usually what matters most.
Forex markets spend a lot of time pricing what may happen next. By the time the Fed actually moves, part of the reaction may already be behind us.
The Dollar Trades the Outlook
Interest rates matter because they affect the return investors can earn on US assets.
If markets expect US rates to stay high, Treasury bonds can remain attractive compared with bonds in countries where rates are lower. That can support demand for dollars.
But traders rarely look at the current rate alone.
Imagine the Fed…
