PT Solid Gold Berjangka | Dollar Nurses Losses After Fed Hints Rate Cuts On The Way; Yen Firms
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Solid Gold Berjangka | The dollar weakened against the yen after the Federal Reserve hinted at a possible September interest rate cut.The Bank of Japan raised interest rates to the highest level in 15 years, causing traders to rethink their popular carry trades.
The market had previously fully factored in a 25 basis point rate cut in September, and even after Policy Board member Powell said he was not considering a 50 basis point rate cut “right now,” there was a growing belief that the Fed was about to cut rates significantly.
Goldman Sachs strategists said that Chairman Powell’s comments suggest that the hurdles for a September rate cut are not that high. They said in a note that “we continue to expect July inflation data to be favorable, and we believe that even acceptable news is likely to determine a September rate cut.”
July inflation is due to be released on August 14. But before that, all eyes will be on the government jobs report for July, which will be released on Friday. According to the median estimate of economists surveyed by Reuters, employment rose by 175,000.
The dollar index, which measures the U.S. currency against six other exchange rates, was little changed at 104.02 after falling 0.38% on Wednesday. The index fell 1.7% in July, its weakest monthly performance this year.
The euro was at $1.0825 after rising 1% in July, while the pound was at $1.2852 ahead of the Bank of England’s policy decision.
The yen rose to 149.515 yen to the dollar, its highest since mid-March, in early trading after rising 1% on Wednesday as BOJ Governor Kazuo Ueda did not rule out an additional rate hike this year.
The BOJ also announced plans to halve its monthly JGB purchases to 3 trillion yen in the January-March 2026 quarter.
Source Reuters