From Fed Rate Cut Expectations Weigh On The Dollar

7/17/2024 3:08:51 PM

(MENAFN- Investor Ideas) The US dollar continued to slide as slowing inflation and other weaker economic data pushed expectations toward a softer monetary policy. market attention shifted to anticipated federal Reserve rate cuts, for which a start has already been factored in for September, with potentially three rate cuts in total by year-end. This led to a bearish outlook for the dollar index and a decline in Treasury yields since the beginning of the month. Market participants are also anticipating additional economic indicators on the Real estate sector today and on the job market tomorrow as well as Federal Reserve governors' speeches to assess the potential timing and scale of forthcoming monetary policy adjustments.

At the same time, increasing expectations for a return of Donald Trump to the White House has also impacted the medium-term outlook for the dollar and Treasury yields. Expectations of pro-growth measures, such as tax cuts and regulatory reforms, have led to changes in the Treasury markets, prompting some investors to reduce holdings in longer-term bonds due to concerns about heightened government borrowing and inflation risks. In this regard, the political developments could continue to fuel uncertainties about forthcoming economic policies and their potential effects.

MENAFN17072024000142011025ID1108451737

Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.