Dollar index erases 0.2% slide as market bets on hawkish Fed

The reversal matters less than the positioning behind it: the index's intraday round-trip signals that hawkish Fed expectations are currently the dominant driver for dollar sentiment, strong enough to absorb an early pullback. That has direct read-through for dollar-sensitive assets, from commodities to non-U.S. currencies, where the policy-rate gap remains the key variable. The open question is whether this hawkish repricing is durable or merely a positioning flush, and whether upcoming Fed communication validates the tighter-path assumption the market is now leaning on.