TOKYO (Web Dask) – The U.S. dollar traded near a 2-1/2 month low against the euro and hovered close to a 10-month trough versus the Australian dollar on Tuesday, as investors solidified expectations of a Federal Reserve interest rate cut this week, with further easing likely in the months ahead.
The greenback also lingered near a more than two-month low against the British pound, pressured further by U.S. President Donald Trump’s calls for aggressive monetary easing.
Markets are pricing in a 25 basis-point cut at Wednesday’s Fed meeting as almost certain, with a small chance of a 50 basis-point “super cut.” Traders expect 67 basis points of reductions through year-end, rising to 81 basis points by January.
Chris Weston, head of research at Pepperstone, said:
“The weight of capital is moving ever closer to a consensus that the Fed cuts not only in September, but also in October, December, and possibly January.”
📊 Currency Moves:
- Euro: $1.1765 (near last week’s 2.5-month high at $1.1780)
- Sterling: $1.3605 (close to July highs)
- Australian Dollar: $0.6672 (near 10-month peak at $0.6674)
- Dollar/Yen: 147.42 (flat)
Softening U.S. labor market data has accelerated bets for deeper easing, pushing the dollar and bond yields lower while fueling equities. Wall Street hit new records on Monday.
