Dollar on back foot as traders eye series of Fed rate cuts
The dollar traded near a 2-1/2 month low against the euro and close to a 10-month trough versus the risk-sensitive Aussie on Tuesday as investors cemented bets for a Federal Reserve interest rate cut this week and more to follow.
The greenback changed hands just shy of a more than two-month low on the British pound with U.S. President Donald Trump renewing calls for aggressive monetary easing.
Markets see a rate reduction of at least 25 basis points on Wednesday as a certainty, with a small chance of a super-sized 50 basis-point cut. A total of 67 basis points of reductions are seen over the rest of this year, rising to 81 basis points by end-January.
Trump in a social media post on Monday called on Powell to enact a "bigger" cut to benchmark interest rates in a social media post, pointing to the housing market.
Rapidly softening labour market data has been the key driver of the ramp-up in easing bets in recent weeks, resulting in a lower dollar and bond yields while pushing up equity prices, with Wall Street setting new records on Monday.
The euro was little changed early in Asia's morning, changing hands at $1.1765, not far from last Tuesday's high of $1.1780, a level that had not been seen since July 28.
Sterling was steady at $1.3605 after reaching $1.3621 in the previous session for the first time since July 8.
The Australian dollar held firm at $0.6672, right below Monday's high of $0.6674, the highest since November 8.
The U.S. dollar was flat at 147.42 yen .
Source : Reuters
