US Dollar Weakens Slightly, Fed Rate Cut Sentiments Weigh on Markets

The US dollar edged slightly lower on Thursday, weighed down by lower US bond yields and increased expectations for a rate cut by the Fed.

US dollar index DXY

The US dollar edged slightly lower on Thursday, weighed down by lower US bond yields and increased expectations for a rate cut by the Fed. At the time of writing, the US dollar index DXY is trading at around 97.07.

Stronger than expected retail sales data had helped the dollar strengthen up to 97.44 on Wednesday, but it gave back some of its gains as Treasury yields declined over weak data from the US housing market and ongoing trade tensions between US and China.

Recent economic data releases from the US have been signaling that the US economy’s health is strong, but the Fed rate cut sentiments continue to dominate. Markets are expecting a 0.25% rate cut during the Fed’s July policy meeting.

On Wednesday, the IMF remarked that the US dollar appeared to be overvalued by as much as 12% on the basis of near-term economic fundamentals, especially because of the US-China trade war. These comments have also caused the dollar to weaken against other major currencies.

ABOUT THE AUTHOR See More
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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