FOREX
The US dollar index, which tracks the greenback's performance against a basket of other major currencies, has hit its lowest level since early January. The dollar's weakness stems from rising expectations that the Federal Reserve will begin cutting rates next month. Investor sentiment now leans toward more aggressive cuts than previously anticipated, with some forecasting reductions totalling 0.75% by year-end. This raises the question of whether September's rate cut will be 25 or 50 basis points. In this context, all eyes are on Jerome Powell's upcoming speech at Jackson Hole later this week. The Fed chairman will likely acknowledge that with inflation easing and economic activity slowing in the US, the conditions are ripe for a rate cut. However, traders will closely analyse his remarks, eager for hints on how aggressively the Federal Reserve will initiate the cutting cycle.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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