"The US dollar lingered near multi-year lows on Thursday after the Federal Reserve delivered a widely expected quarter-point rate cut. Fed projections pointed to two additional cuts this year, which could continue to weigh on the currency. The Fed's Summary of Economic Projections reinforced the risks for the dollar, with officials now anticipating the policy rate at 3.50-3.75% by year-end, compared to 3.75-4.0% projected in June."
"Still, Powell resisted validating bets for deeper cuts, noting that the path ahead depends heavily on incoming data. Additionally, his cautious tone could limit the immediate pressure on the dollar. However, the currency could remain exposed to the upcoming economic data releases. Treasury yields were volatile but remained near the levels seen during the last few days as the 10-year stayed above the 4.0% mark."
The Federal Reserve delivered a quarter-point rate cut and projected two additional cuts this year, lowering the expected policy rate to 3.50-3.75% by year-end from the June projection of 3.75-4.0%. Fed projections and the Summary of Economic Projections increased downside risks for the dollar. Chair Powell emphasized that the outlook depends on incoming data and adopted a cautious tone, which could limit immediate downward pressure on the currency. Treasury yields remained volatile with the 10-year above 4.0%. Markets await jobless claims at 240K; softer labour data could spur faster cut expectations and weaken the dollar.
Read at London Business News | Londonlovesbusiness.com
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