Dollar Corrects, Market Confident the Fed Will Cut Interest Rates
The dollar index held below 100 on Wednesday, continuing its decline from the previous session. Pressure stemmed from weak US economic data, reinforcing market confidence that the Fed will cut interest rates at its December meeting.
Data showed that US retail sales rose less than expected in September, while consumer confidence fell sharply in November. This indicates that consumer spending is beginning to slow after months of strong demand.
Currently, market participants estimate an 84% chance of a 25 basis point Fed rate cut next month, up sharply from around 50% a week earlier. This expectation is a major factor in the dollar's weakness.
Meanwhile, reports also indicate that Kevin Hassett, Director of the White House National Economic Council, is now a leading candidate for the next Fed Chair. Hassett is known for his view that interest rates should be lower than their current levels, causing the dollar to weaken against many currencies, particularly the New Zealand dollar and the Australian dollar.
Source: Newsmaker.id
