Dollar Has Little Scope to Fall Further -- Market Talk
The dollar has little scope to extend recent falls given expectations for cautious interest-rate cuts from the Federal Reserve, Monex Europe analysts say in a note. Swap rates imply 1.5 rate cuts this year but the Fed could deliver less given sticky inflation, they say.
A much lower dollar should require a "fundamental reassessment of U.S. growth exceptionalism or a bout of immaculate disinflation" but neither look likely in the immediate future.
A notable dollar recovery is, however, also unlikely this week. Fed meeting minutes Wednesday could read as somewhat dated, leaving the dollar's fortunes at the hands of "unpredictable" President Trump. The DXY dollar index rises 0.1% to 106.784 after hitting a two-month low of 106.566 Friday.
Source: Bloomberg
