Despite a recent boost, analysts believe the U.S. dollar’s upward momentum is likely to slow due to the lack of clear signals regarding future interest rate cuts. Francesco Pesole, ING Bank analyst, points out that sustained gains are only achievable if the Federal Reserve announces rate reductions before March 2026. This outlook stems from current market expectations regarding Fed policy. The dollar’s strength was driven by reduced concerns about regional bank stability earlier this week, but Pesole emphasizes its limited potential for future gains without a major shift in Fed rate cut expectations. He suggests that the most likely catalyst for a change in rate-cut expectations would be strong U.S. inflation data due for release on Friday, although a significant surge is unlikely. The dollar’s near-term trajectory may remain restricted as traders await further clarity regarding the Federal Reserve’s upcoming policy decisions.