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Dollar Hovers Near 7-Week Low On Fed Rate Cut Prospect

Author:
Eray Bekir
Investors

The dollar struggled near seven-week lows on Wednesday after U.S. central bank officials hinted at the possibility of an interest rate cut in the face of rising risks to trade and global growth.

Federal Reserve Chairman Jerome Powell dropped his standard reference to the Fed being “patient” in approaching any rate decision on Tuesday, saying instead the central bank will respond as “as appropriate” to trade pressure.

Masafumi Yamamoto, chief currency strategist at Mizuho Securities, said major currencies barely reacted to Powell’s comments as investors had already priced in several rate cuts by the Fed on the back of the shifting global growth outlook.

The Fed chairman’s comments came a day after St. Louis Federal Reserve President James Bullard said in a speech that a rate cut may be needed “soon.”

Rate cuts by some central banks in recent weeks could potentially signal the start of a global monetary easing cycle to stave off a sharper economic downturn.

Source: www.cnbc.com

 

 

International Financial Markets Department

Euro-Finance Ltd.

forex@eurofinance.bg

www.eurofinance.bg 

*This material should not be considered as a recommendation for buying/selling securities.