Dollar surges as Fed hawks return.

Despite concerns over the debt ceiling and banking anxiety, the US economy is holding up well, leading to a resurgence of Federal Reserve hawks. Business surveys from Europe and Japan show brisk services-led growth, and the US equivalent is due later on Tuesday. Although there is some appetite among Fed officials for a pause in the rate hike cycle next month, some officials are arguing for even tighter monetary policy to ensure inflation eventually returns to target. This has led to markets scaling back expectations for Fed rate cuts later this year, reigniting the dollar.