The market is betting that the Fed will cut interest rates in the first half of next year and the U.S. dollar will have its worst monthly performance in a year | Anue Juheng-Forex

dollar indexIt fell on Monday (27th) and was at a nearly three-month low. Suppressed by expectations that the Federal Reserve may start cutting interest rates in the first half of next year,dollar indexThis month is expected to post its largest monthly decline in a year.

In late New York trading, ICE tracks the dollar against six major currencies. dollar index (DXY) fell 0.21% to 103.19, almost the lowest since August 31.DXY This month’s decline may exceed 3%, marking the worst monthly performance since November 2022.

Monex USA foreign exchange trader Helen Given said that compared with the European Central Bank and the Bank of England, the possibility of an early interest rate cut by the Federal Reserve in 2024 has increased, which is putting pressure on the dollar today.

CME’s FedWatch tool shows that the probability that the Federal Reserve will start cutting interest rates as early as March is about 23%, and the probability of cutting interest rates starting in May has risen to about 50%.

Economic data showed that new home sales in the United States fell more than expected in October, falling 5.6% year-on-year to 679,000 households after seasonal adjustment. The September data was also revised downward from the original 759,000 households to 719,000 households.

Given said: “Before the U.S. third-quarter gross domestic product (GDP) is released on Wednesday (29th), it is unlikely that the dollar will reverse its decline. If the U.S. economy can continue to grow, rather than as some economists With a sharp decline like that forecast, we could see a stronger dollar at the end of the month.”

Investors are also focusing on a series of events and economic data this week that may affect future interest rate trends, including the postponed Organization of the Petroleum Exporting Countries (OPEC+) meeting, the personal consumption expenditures price index (PCE), the Fed’s favorite inflation indicator, andEURDistrict, Australian Consumer Price Index (CPI) and other data. The market is also paying attention to the Bank of New Zealand’s interest rate decision and China’s Purchasing Managers Index (PMI).

In terms of other currencies, the U.S. dollarJPYDown 0.5% to 148.65 JPY。EURIt edged up 0.16% to $1.0954, rising more than 3% so far this month.

European Central Bank (ECB) President Christine Lagarde said on Monday, EURInflation pressure in the region is easing, but wage growth remains strong, and the battle to curb price pressure is not over yet.EURThere was little reaction to Lagarde’s remarks.

GBPContinuing last week’s gains, it rose 0.2% to $1.2627, at a more than two-month high.

Australian dollarClimbing to a more than three-month high of $0.6606, up nearly 0.4%; ahead of this week’s central bank interest rate decision,New Zealand dollarup 0.3% to $0.6098. Market expectations are that the Bank of New Zealand will keep the official cash rate unchanged at 5.5%.

RMBAfter the official central parity rate against the U.S. dollar stopped rising five times in a row, the offshoreRMBIt fell 0.13% against the dollar to 7.1593 RMBto US$1, onshoreRMBIt fell slightly by 0.06% to 7.1528 RMBagainst 1 US dollar.

As of approximately 6:00 Taiwan time on Tuesday (28th), price:

• dollar indexReport 103.2158. -0.2105%
• EURExchange rate quote against the US dollar (EUR/USD) 1 EURAgainst US$1.0954. +0.1554%
• GBPExchange rate quote against the US dollar (GBP/USD) 1 GBPagainst US$1.2627. +0.1745%
• Australian dollarExchange rate quote against the US dollar (AUD/USD) 1 Australian dollaragainst USD 0.6606. +0.3799%
• USD vs.Canadian Dollars (USD/CAD) exchange rate is quoted at 1.3615 per US dollar Canadian Dollars。-0.1247%
• USD vs.JPY (USD/JPY) exchange rate was quoted at 148.68 per U.S. dollar JPY。-0.4819%