Dollar falls against major currencies amid inflation data, presidential debate
Date
9/11/2024 3:41:41 AM
(MENAFN) On Tuesday, the US dollar weakened against other major currencies, extending gains made on Monday, as traders anticipated key inflation data and a widely awaited presidential debate. However, the results of the debate are unlikely to have a significant impact on the overall direction of monetary policy, which remains under close scrutiny.
The Federal Reserve is expected to cut interest rates next week for the first time in more than four years, although the extent of the rate cut is still being debated. According to estimates from the London Stock Exchange Group, Fed funds futures markets are currently pricing in a 73 percent chance of a 25 basis point cut at the upcoming September 17-18 policy meeting, with a 27 percent chance of a larger 50 basis point cut.
The odds of a 50 basis point rate cut surged to 50 percent on Friday, following a mixed US jobs report that left some uncertainty around the labor market's strength. Meanwhile, in China, import growth came in below expectations, increasing by just 0.5 percent, a sign of weak domestic demand. This followed softer-than-expected inflation data on Monday, which further highlighted sluggish economic activity.
Despite the disappointing import data, the Chinese yuan only dipped slightly against the dollar, which rose 0.1 percent to 7.1212, with losses tempered by better-than-expected export figures. In the US, the core consumer price index for August is expected to rise by 0.2 percent month-on-month, in line with the previous month’s increase. On a yearly basis, however, inflation is projected to ease to 2.6 percent, down from 2.9 percent in July.
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