As traders increasingly anticipate further monetary easing from the Federal Reserve, expectations are growing for a potential 25-basis point rate cut in September, which contributes to the ongoing downward pressure on the US dollar.
The dollar index has dropped sharply, reaching its lowest level since April, as the market predicts a total of three rate cuts by the end of the year, fueling confidence in alternative major currencies.
The upcoming speech by Fed Chair Jerome Powell at the Jackson Hole symposium is highly anticipated, as traders expect clarity on the Fed’s monetary policy direction amidst ongoing uncertainty.
Expected weakness in U.S. Manufacturing and Services PMIs later this week may exacerbate the decline of the U.S. dollar and simultaneously affect U.S. Treasury yields.
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