Analyst: Dollar has little room to fall further given cautious Fed rate cut expectations

Analysts at Monex Europe said in a report that the dollar has little room to extend its recent downtrend in light of expectations that the Federal Reserve will be cautious in cutting interest rates. Swap rates reflect 1.5 rate cuts this year, but given sticky inflation, the Fed's rate cuts could be smaller. A significant depreciation of the dollar would require ‘a fundamental reassessment of the uniqueness of US economic growth or a perfect counter-inflationary phenomenon’, both of which are unlikely to happen in the near future. However, a significant rally in the dollar this week is also unlikely. The release of the Fed minutes on Wednesday may seem a little dated, so the fate of the dollar will depend more on the elusive Trump. (GOLDEN TEN)

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