US Dollar Under Pressure, Interest Rate Cut Expectations Strengthen
Tonight, the greenback weakened amid global optimism and hopes for an end to the US government shutdown.
The US dollar (USD) came under pressure again in Tuesday evening's Asian trading, as market confidence grew that the Federal Reserve (The Fed) would cut interest rates sooner than expected. Positive sentiment regarding the prospect of an end to the US government shutdown also prompted investors to shift to riskier assets.
The dollar index (DXY) fell to around 99.5, near a three-month low. This weakening occurred after a series of statements by Fed officials emphasized that the next policy direction would depend heavily on economic data delayed during the shutdown.
"The market is starting to price in the risk that inflation is sufficiently contained to allow for the first interest rate cut in December," said a Tokyo-based currency analyst.
Meanwhile, the strengthening of the Japanese yen and the euro added pressure on the dollar. The yen briefly strengthened to 145 per dollar, while the euro broke through 1.12. Market participants believe that appetite for risk assets has increased following news that the US Senate has reached a compromise to end the government shutdown that has lasted more than a month.
Source: Newsmaker.id
