PT Solid Gold Berjangka | Dollar Wallows at Multi-Month Lows as Fed Cut Bets Grow

02:25 04 June in Commodity, PT SGB, SOLID GOLD BERJANGKA | SOLID GROUP


Solid Gold Berjangka | The dollar slumped against the euro and Pound at its lowest since March as signs of a softening in the US economy boosted the case for a previous Fed rate cut.

The U.S. currency snarled near a two-week trough to the yen after data showed the second straight month of slowing manufacturing activity and an unexpected decline in construction costs.

Following the data, fed funds futures increased the likelihood of a 9-month rate cut to about 59.1 percent, according to LSEG’s rate probability app.

This helps knock the dollar on the first monthly loss of the month, compared with odds of about 55% on Friday, when the data showed stabilization of consumer price pressure. The stakes were slightly below 50% at the beginning of last week.

An important test will be provided in the form of a monthly US payroll on Friday.

Currently, the Fed’s 11-month meeting is fully priced out of Q1 interest rate increases, with a total tightening of 41 basis points by the end of the year.

The next policy meeting of the Federal Reserve will end on 6/12, when consumer price data also has a deadline. Traders and analysts do not see the risk of policy changes in their gatherings, but the authorities update their economic and interest rate forecasts.

The dollar index, which measures currencies against the euro, pound, yen and other major peers, eased 0.05 percent to 103.99, its lowest level since May 9.

The euro added 0.11% to March1.09155, the level last seen in 21 months.

The European Central Bank telegraphed that policymakers would cut interest rates at Thursday’s meeting, but a rise in inflation in data last week could give officials a pause as they consider when to ease.

Sterling rose 0.05 percent to11.2814, its strongest since July 14.

However, the dollar added 0.14% to 156.255 yen, down from an overnight low of 155.95 to below 156 for the first time since the 21st.

The Bank of England and the Bank of Japan may hold an important policy meeting later this month.

Elsewhere, the New Zealand dollar rose 3.8 percent to00.6194 for the first time since March. Australia was trading flat at overnight 0.66895, keeping close to a two-week high of two0.6695 from overnight.

Source: Reuters