Traders are betting on a moderate cut by the Fed while the strength of the greenback leads to thoughts of a victory for Donald Trump.
He global dollar remains near a two-month high amid traders’ bets on a moderate interest rate cut on the part of the Federal Reserve of the United States (Fed) and the analysts’ readings about a possible triumph of donald trump in the presidential elections; to which was added the fall of the pound sterling in light of data that showed that inflation in England slowed more than expected, so the central bank could make two interest rate cuts in the remainder of the year.
He dollar index —which measures the performance of the greenback in relation to a basket of six other internationally relevant currencies— stood at 103.23 units in the early hours of Wednesday, close to its highest level since early August.
The perspectives of the monetary policy of the Federal Reserve They are the core of the strength of the dollar right now: Traders are pricing in about 46 basis points (bps) of rate cuts this year when, less than a month ago—after the first cut in the Fed, at 50 bp—cuts of almost 80 basis points were expected. In parallel, expectations of a 25-point cut at the next meeting of the Federal Open Market Committee (FOMC) on November 7 they reach a 92% probability, with only an 8% probability that there will be no changes, according to the tool FedWatch of CME Group.
Meanwhile, market prices still strongly favor a total of 50 basis points of easing this year, but comments from central bankers overnight shifted toward a hawkish line. Raphael Bostic, of the Atlanta Federal Reservesaid it had forecast only a 25 basis point rate cut for this year, while Mary Daly, of the San Francisco Federal Reservesaid “one or two” cuts in 2024 would be “reasonable.”
For its part, the pound fell below $1.30 for the first time in two months, to $1.3032, while shares of the United Kingdom They got a boost, lifting the FTSE 100 (.FTSE), opens a new tab, up 0.7% on the day.
This was because Wednesday’s data showed that the british inflation slowed more than expected last month, cementing expectations that the Bank of England will cut rates at least once, if not twice, this year.
In Uruguay, the dollar traded positively
In Uruguay, meanwhile, the dollar rose 0.64% compared to Monday and closed at 41,689 pesos, according to the price of the Central Bank (BCU), recovering ground after three consecutive losses and approaching the 42 peso range again.
Within the framework of a month with ups and downs, the US currency accumulates an appreciation of 0.12%, while, if compared in the annual accumulated, the dollar It is 6.83% above its 2023 closing value and slightly below market expectations.
Source: Ambito
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