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05/08/24
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USD Lower as US Rate Cut Bets Increase
On Monday, the U.S. dollar dropped to a nearly 7-month low versus a basket of peers, and sold off sharply versus the Japanese yen and the euro, as last week’s economic data increased the chances of a economic downturn in the U.S. and larger rate cuts from the Federal Reserve.
The U.S. dollar index, which measures its strength against 6 other major currencies, was 0.7% lower at 102.39, after dropping as low as 102.15, the weakest level since Jan. 12.
The euro was 0.5% higher at $1.0968, after lifting as high as $1.1009, the strongest since Jan. 2. The dollar was 2.3% lower at 143.13 against the yen, near the weakest level this year.
Softer-than-expected U.S. jobs data, together with disappointing earnings reports by big tech firms and increased worries over China’s economy, have led to a global sell-off in high-yielding currencies, oil, and stocks in the last week as investors moved to the safety of cash.
On Monday, the selling continued, and U.S. Treasury yields fell further, stock indexes moved to the red, the dollar lost ground, and bitcoin dumped.
An FX trader at Monex USA, Helen Given, said the USD was taking a beating as traders continue to move into bets that the Fed would ease big this year.
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