Markets brace for volatility: Trump, Fed, and rate cut bets in focus

The dollar stabilized Monday as markets eyed a high-stakes meeting between U.S. President Trump and Ukraine’s Zelensky, alongside the Fed’s Jackson Hole symposium later this week.

The euro held at $1.1704, while the pound edged up slightly to $1.3563. The dollar index steadied at 97.85 after last week’s 0.4% drop. Traders scaled back bets on a large Fed rate cut in September, with odds now at 84% for a quarter-point reduction—down from 98% last week.

Focus on Ukraine talks, Fed signals
Trump, fresh from talks with Russia’s Putin, is pushing Ukraine toward a peace deal rather than a ceasefire. Meanwhile, Fed Chair Powell’s Jackson Hole speech on Friday will be scrutinized for policy hints.

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“Powell may signal a balanced view, but markets are already pricing in a September cut,” said CBA’s Joseph Capurso.

Stocks hit records, Crypto pulls back
Asian shares rose, with Japan’s Nikkei hitting a new high. Bitcoin dipped 1.7% to $115,700 after its recent rally. Oil prices slipped as tensions over Russian supply eased.

Coming up: Fed minutes (Wed) and New Zealand rate decision (Wed), expected to cut to 3.0%.