The Dollar Index measures the dollar’s movement against six major basket currencies. fell to the lowest level in 4 months, coinciding with the fall in US government bond yields.
As of 7:54 p.m. Thai time, the dollar index dropped 0.52% to 102.33, the lowest level since August. Meanwhile, the dollar fell 0.5% to 1.093 against the euro and fell 0.77% to 141.77 yen.
The yield on the 10-year US Treasury note fell below 4% today, pressured by expectations for lower interest rates next year.
Investors put their weight in forecasting that The US Federal Reserve (Fed) will cut interest rates at the earliest at its March 2024 meeting. After the Fed signaled the end of the cycle of interest rate increases. and cut interest rates at least three times in 2024 at the meeting of the Fed Monetary Policy Committee (FOMC) yesterday.
CME Group’s latest FedWatch Tool indicates that investors give 81.4% of their weight in predicting that the Fed will maintain interest rates at 5.25-5.50% at its January 30-31, 2024 meeting.
Moreover, investors weigh 72.6% in expecting the Fed to cut interest rates by 0.25% to 5.00-5.25% at its March 2024 meeting. It was originally expected that the Fed would cut interest rates as early as their May 2024 meeting.
The FOMC unanimously decided to maintain short-term interest rates at 5.25-5.50% at yesterday’s meeting. This is the highest level in more than 22 years.
Announcement of maintaining the interest rate As expected by the market This is the third consecutive rate freeze after the Fed raised interest rates 11 times since the start of the rate hike cycle in March 2022. As a result, the Fed raised interest rates by 5.25%.
In forecasting the policy interest rate (Dot Plot), Fed officials signaled interest rate cuts at least 3 times in 2024, with each cut 0.25% for a total of 0.75%, from the previous signal of only 2 interest rate cuts in 2024. September meeting
In addition, Fed officials signaled four more interest rate cuts in 2025, each cut by 0.25%, for a total of 1.00%.
In 2026, Fed officials signaled another 3 interest rate cuts, 0.25% each, for a total of 0.75%, which would result in the Fed interest rate falling to the range of 2.00-2.25%, which is close to the long-term interest rate trend at 2.50. %
Meanwhile, in a statement after the meeting The Fed has signaled an end to the cycle of rate hikes, stating that “the Federal Reserve Board will consider a number of factors for ‘any’ further tightening of monetary policy,” which is unprecedented rhetoric. In a previous statement
2023-12-14 13:04:52
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