The global dollar falls and enters a period of greater weakness

He global dollar continues to decline after the United States Federal Reserve (Fed) announce the first interest rate cut in more than four years and review its outlook for monetary policy.

After the meeting ended, Federal Open Market Committee (FOMC) and that the authorities of the Fed announced that, finally, the long-awaited first rate cut was by 50 basis points – expectations were already leaning towards a expansive result in the days leading up to it, with money markets pricing in around 65% the probability of a half-percentage point cut—; dollar rose amid a volatile close. However, in the early hours of Thursday, it already marked a drop in its price.

Thus, the dollar index The dollar —which measures the performance of the greenback against a basket of six major international currencies— fell 0.30% to 100.57 units. In the previous session it had reached 100.21, its lowest level in more than a year.

“The decision of the Fed was quite bold, which predicts a rebound in risk and a further weakness of the dollar in the short term,” he told Reuters Lefteris Farmakiscurrency strategist of Barclays. The Federal Reserve brought rates from their highest historical range of 5.25% – 5.50% to 4.75% – 5%.

“The bar, however, is set quite high to rely on the Fed for greater weakness of the dollar in the longer term,” he added: “The relaxation cycle of the Fed “that the markets are discounting is quite significant.”

Money markets are expecting further rate cuts of 70 basis points in 2024 and 191 basis points in September 2025. Monetary policymakers at the Fed, meanwhile, are looking at a further 70 basis point cut in 2024 and a further 191 basis points in September 2025. Fed The Fed on Wednesday projected the benchmark interest rate would fall by another half-percentage point later this year, a full percentage point next year and half a percentage point in 2026, though it said the outlook for that long was uncertain.

In front of the yen, he dollar rose 0.54% to $143.07, while the euro gained 0.46% to $1.1169, but was below a three-week high reached in the previous session.

In Uruguay, the dollar reached a high of almost two years

In Uruguay, Meanwhile, the dollar rose 0.59% compared to Tuesday, closing at 41.307 pesos in the interbank quote. Central Bank (BCU), thus breaking its annual record after chaining its third consecutive day of increases and reaching a maximum in almost two years.

The US currency has now accumulated a monthly variation of 2.41% and an annual variation of 5.86%, since its price is 2.29 pesos above the one registered after the closing of the last exchange day of last year.