BENGALURU - The U.S. dollar’s dominance will come to an end if the Federal Reserve gives in to pressure from financial markets and President Donald Trump and chops interest rates another 50 basis points this year, a Reuters poll of market strategists showed.
The U.S. central bank delivered a rate cut last week but the dollar .DXY held firm, mostly driven by Fed Chair Jerome Powell’s comments citing the latest move as “a mid-cycle adjustment to policy,” dampening expectations for aggressive easing. “The dollar needs to be knocked off its perch as one of the key high yielding G10 currencies. So if rates evolve the way the markets are discounting at the moment...that would probably go a long way in weakening the dollar,” said Adam Cole, head of FX strategy at RBC.
“We are seeing a Fed which is under extreme political pressure. Whilst Powell continues to push back against that in public, it is still a pretty invidious situation,” said Jeremy Stretch, head of G10 FX strategy at CIBC. That makes the argument on interest rate differentials invalid at least until the Fed follows through on expectations, according to Eric Theoret, currency strategist at Scotiabank. He argues currencies are being driven more by sentiment and risk aversion rather than economic fundamentals.
Analysts have been trimming their 12-month views for almost a year and the latest consensus is the lowest in two years.
Market whims? America allows capitalism, if it won't play nice we'll tax the excess profit from it until it behaves.
They’re going to redo the dollar before the Tubman? Terrible...
It's already microscopic. Are we going atomic?
The gov has advise the middle class to save. After 10 YRS of 0.001%interst on savings. The past year we have seen a slight increase to around 2.25% interest. Now b/c of a created trade war the idiot wants to send the MC back to 0.001% interest. MUST KEEP THE 1% happy
(Clears throat) bryancrabtree
Y yo aquí sin un dolor para comer
It's too late.
“Gives in to market whims,”. i.e. the temper tantrums of the brat in the Oval Office.
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