Fed Hawkish Stance Drives Bullish Dollar Sentiment Shift

The Fed’s hawkish stance continues to underpin USD strength through widening rate differentials, supported by resilient U.S. growth and sustained capital inflows into equities and AI-driven sectors. This reinforces a structurally bullish outlook for the dollar in the near term.

As a result, EUR/USD and GBP/USD remain under pressure, with downside risks persisting as long as policy divergence between the Fed and other major central banks remains intact.

From a fundamental trading perspective, this is clearly **USD-positive**. As long as the Federal Reserve maintains a hawkish stance while other major central banks lean toward easing, the interest rate differential continues to favor the dollar.

The mention of strong U.S. economic growth and sustained capital inflows, particularly from AI-related investments and equity markets, adds another layer of support for the USD. This isn't just a rate story; it's also a capital flow story.

For me, this keeps the bias **bearish on EUR/USD and GBP/USD**. Unless we see a significant shift in Fed communication or weaker U.S. economic data, I would rather look for selling opportunities on rallies than attempt to catch a bottom. In the current environment, the path of least resistance still appears to favor continued dollar strength.