The market believes that the possibility of a significant interest rate cut by the Federal Reserve has increased, leading to a decline in the dollar
The dollar fell as the market believes there is a higher possibility of the Federal Reserve cutting interest rates by 50 basis points this week instead of 25. Data from LSEG Refinitiv shows that currently, the probability of a 50-basis point cut by the Fed is close to 70%. Ipek Ozkardeskaya, an analyst at Swissquote Bank, said in a report: "I still firmly believe that given the current economic data is not worrisome, a rate cut of 25 basis points would be the best choice. However, The Fed may want to avoid disappointing markets with only a 25-basis point cut and some Democrats' calls for a rate cut of 75 basis points are adding fuel to fire."
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