The U.S. dollar's decline is gaining speed as anticipated interest rate cuts by the Federal Reserve threaten to end the greenback's years-long period of...
NEW YORK, Sep 5 - The U.S. dollar's decline is gaining speed as anticipated interest rate cuts by the Federal Reserve threaten to end the greenback's years-long period of strength.
"We've always had the view that almost regardless of other circumstances, once the Fed starts cutting rates, that the dollar would lose ground," said Brian Rose, senior U.S. economist at UBS Global Wealth Management. "We still have that view." Investors, however, are betting on big rate cuts ahead. Futures tied to the Fed's key policy rate show traders pricing in around 100 basis points of cuts this year, compared to about 60 basis points for the European Central Bank.Commodity Futures Trading Commission data tracking positioning by hedge fund and other speculative investors showed bets on the dollar swung net short to the tune of $8.83 billion for the week ended Aug. 27, the first bearish position in about six months.
Monex USA nevertheless sees the euro at $1.13 by June 2025, implying a drop of about 2% against the dollar. Rose, of UBS, has a similar target for the currency pair. Trump has railed against the currency's strength, saying it hurts U.S. competitiveness. Yet many of his policies, such as tariffs and tax cuts, could strengthen the dollar, said Bardas.
Basis Points Brian Rose U.S. Dollar Federal Reserve Jerome Powell
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