Asia stocks firm, dollar sags with US yields on Fed cut bets

FILE PHOTO: People walk on an overpass with a display of stock information in front of buildings in the Lujiazui financial district in Shanghai, China August 6, 2024. REUTERS/Nicoco Chan/File Photo

The dollar remained weak after slumping overnight to its lowest level to the euro since the end of last year. The single currency traded flat at $1.1009 after reaching $1.10475 in the previous session. Traders remain convinced that the Fed will reduce rates on Sept. 18 for the first time in 4-1/2 years, but are split on whether policy makers will opt for a super-sized 50 basis-point reduction. While inflation is slowing, signs it may remain sticky spurred a reduction of bets on a larger cut to 37.5 per cent from about 50 per cent a day earlier.

Sterling remained depressed after soft UK inflation figures hinted at faster, deeper Bank of England rate cuts. The currency was flat at $1.2824 after sagging 0.3 per cent on Wednesday.

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