ChainCatcher news, the US dollar fell during Monday's Asian trading session as traders increasingly bet on the Federal Reserve to cut interest rates by 50 basis points this week. The decline in the US dollar boosted major currencies such as the yen, which rose to its highest level since July 2023.
After weeks of debate over whether the Fed would kick off its easing with a 25 basis point or 50 basis point rate cut, traders are leaning toward the latter option. Futures prices tied to the Fed’s decision to cut rates this week are pricing in about a 58% chance of a 50 basis point cut, compared with a 50-50 split late Friday.
Rodrigo Catril, a strategist at National Australia Bank, said: "We believe that the Fed is about to usher in a new round of easing cycle, which is a major disadvantage for the US dollar. As the Fed relaxes monetary policy next year and lowers the fund rate to neutral or even below the neutral level, the US dollar will begin to fall cyclically." (Jinshi)