Dollar Strong Ahead of Fed Meeting, but Dovish Surprise Risks Loom

The dollar strengthened into the July 29, 2026 FOMC meeting. MUFG Research called a prior sell-off short-lived on July 28. But markets have already priced in a hawkish hold — a pause that keeps rate hikes possible. That creates asymmetric risk: a dovish Fed surprise could spark a sharper dollar sell-off than before.