Dollar Strengthens Amid Declining Rate Cut Odds
The dollar rose in European trade on Friday against a basket of major rivals, maintaining gains for the fourth straight session near six-week highs as the odds of a June Fed interest rate cut decline.
Now investors await important US personal spending data later today, in addition to Fed Chair Jerome Powell’s speech.
Greenback's Quarterly Profit
The greenback is heading for the biggest quarterly profit since 2022, as pricing for a 0.25% Fed interest rate cut in June drops.
A string of strong US data in recent days in addition to bullish remarks by Fed officials will likely nudge the Fed towards holding interest rates unchanged for an extended duration.
The Index
- The dollar index rose 0.1% to 104.67, with a session-low at 104.51.
- The index rose 0.25% on Thursday, the third profit in a row, scaling a six-week high at 104.73 following US growth data.
Waller's Remarks
Federal Reserve member Christopher Waller said on Wednesday that there’s no rush to cut interest rates, and that he wants to see at least two months of low inflation data before cutting rates.
He added that recent US data could delay the number of expected US interest rate cuts this year.
US Rate Prospects
- Earlier US data showed GDP growth at 3.4% in the fourth quarter of 2023, beating estimates of 3.2%.
Following the excellent data, the odds of a 0.25% Fed interest rate cut fell from 63% to 59%.
Quarterly Trades
The dollar index is up 3.25% so far this quarter on track for the third quarterly profit in the last three quarters.
The gains are underpinned by increasing bullish remarks by Fed officials following upbeat economic data.
End of Article
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
