The greenback fell to a more than one-year low on Tuesday after gains in the previous session.
He dollar fell to its lowest level in more than a year in the face of a pound sterling which hit its highest level in more than two years, while investors await economic data from USA key this week and next.
Currency movements continued to be driven by the prospect of future rate cuts. interest rateswhich has put pressure on the dollar in recent weeks. Investors see a rate cut at the Fed’s September meeting as a Federal Reserve (Fed) It is almost certain, and the debate now focuses on the possibility of a 50 basis point (bp) cut instead of 25.
He dollar index fell 0.3% to 100.53, having fallen to its lowest level since July last year. In August, the US currency fell 3.2%, on track for its biggest monthly drop since November 2022.
The British pound has been one of the beneficiaries of the weaker US currency, hitting its highest level since March 2022 at $1.3246 on Tuesday. It was last up 0.3% at $1.3226.
Meanwhile, the euro gained 0.2% against the dollar to $1.1181, just above the 13-month high reached on Monday. “After a strong rally since early August, it looks like euro/dollar could experience some consolidation,” he said. Chris Turner, ING’s global head of markets, in a note to clients.
The rate cut
According to the calculations of LSEG, The rate futures market has assigned a 37% probability to the Fed raising rates by 50 basis points, unchanged from Friday afternoon. Futures traders are pricing in about 106 basis points of cuts in 2024.
“From Jackson Hole, The dollar has been going down, but I would say it’s more sideways than anything else,” he said. Eugene Epstein, head of structured products for North America at Moneycorp in New York, referring to the Kansas City Fed symposium in Jackson Hole, Wyoming, last week.
Source: Ambito
