NY foreign exchange market = dollar recovery, view of oversold Focus on Fed Chairman’s speech

In the New York foreign exchange market, the dollar rose against the euro, amid widespread recognition that the dollar’s recent depreciation was too great. Photo taken in March 2023 (2024 Reuters / Dado Ruvic)

NEW YORK (Reuters) – In the New York foreign exchange market, the dollar rose against the euro, amid widespread recognition that the dollar’s recent depreciation was too great. The speech given by US Federal Reserve Chairman Jerome Powell on the 23rd is attracting attention in the market.

The dollar has been depreciating recently amid growing concerns that the US economy is weakening and expectations of interest rate cuts. However, it remains unclear how weak the US economy is and whether the Federal Reserve will respond by cutting interest rates by 0.50 percentage points, a larger than usual rate cut, at its meeting in -September.

“The dollar has been under a lot of pressure recently and is now oversold,” said Brad Bechtel, head of foreign exchange at Jefferies in New York. As interest rates are expected to be cut in Europe and the UK, the depreciation of the dollar against the euro and the British pound could be too great, and the Fed, the European Central Bank (ECB), and the Bank of England announced finance. the discount cycle to be similar.

According to CME FedWatch, there is a 75% chance that the Fed’s expected rate cut will be 0.25 percentage point at next month’s meeting, and a 25% chance that it will be 0.50 percentage point.

In addition to the level of interest rate cuts at the Fed in September, the market is also paying close attention to the speech that the Chairman of the Federal Reserve Jerome Powell will give at the Jackson Hole economic conference on the 23rd, the hope to find clues about the level. of the Fed’s interest rate cuts in September and the future path of monetary policy.

In late trading, the dollar index rose 0.38% to 101.50.

The euro/dollar exchange rate fell 0.36% to $1.111.

The British pound/dollar exchange rate rose 0.02% to $1.3093.

The dollar/yen exchange rate rose 0.65% to 146.2 yen.

The crypto asset (virtual currency) Bitcoin fell by 1.43% to $60,370.

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