Dollar Rises as Currency Traders Bet on Fewer Fed Rate Cuts

The dollar edged higher for a second day as currency traders bet the Federal Reserve won’t be able to deliver three rate cuts in 2026.

Hedge funds dialed back bearish bets against the greenback on Tuesday as strategists questioned whether economic data — especially inflation — will unlock interest-rate cuts on the scale expected by investors. Money markets are pricing about 60 basis points of rate cuts by the end of the year.