The dollar has been in a sliding mode since Friday, which suggests that the currency started to feel the heat of the elevated expectations over lower interest rates in the US. Yesterday, St. Louis Fed President Bullard said that a rate cut may be “warranted soon”, reducing further hopes over a “patient” Committee. This morning, the RBA cut interest rates to 1.25% as was broadly anticipated, while the main message we got from the statement is that the Bank will stay data dependent.
USD Starts to Feel the Heat of Fed-cut Expectations
Following Friday’s slide, the dollar continued underperforming against the other G10 currencies on Monday and during the Asian session Tuesday. The main winners were EUR, NOK and CHF, while the currencies which gained the least were JPY and GBP.
With regards to the equity markets, it seems that risk aversion eased somewhat during the European trading, with most...
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