The Ultimate Guide to Understanding the Impact of the U.S. Dollar's Expected Easing Cycle on Global Markets
As the dollar trades near its yearly lows, anticipation is high for the start of a potential U.S. easing cycle with a possible outsized rate cut. The euro remains strong at $1.1123, while the yen hovers around 140.77 after a brief spike.
Fed funds futures are now pricing in a 67% chance of a 50 basis point rate cut, up from 30% just a week ago. Macquarie strategists predict a dovish tone from the Fed, which could lead to weakening of the USD against major currencies, especially the JPY.
The Bank of Japan is expected to maintain its policy, while the Bank of England may leave rates unchanged. Sterling has been performing well against the dollar, reflecting resilience in the UK economy.
As traders focus on the Fed's decision, the Australian and New Zealand dollars have also strengthened. Chinese markets are closed for a holiday break, but the yuan remains steady.
Overall, the global financial markets are closely watching the Fed's upcoming meeting for clues on future monetary policy. Stay tuned for more updates on how these developments could impact your finances.