According to PANews, Barclays foreign exchange strategist Skylar Montgomery Koning said the US dollar is about to rebound because traders overestimated the extent of the Federal Reserve's interest rate cuts and underestimated the retail sales data released on Tuesday.
She predicted that stronger-than-expected retail sales would shift market bets toward a smaller rate cut, boosting the dollar. With just two days to go before the Fed's rate decision, traders are more uncertain about the decision than at any time since 2007.
Barclays expects the Fed to make three 25 basis point rate cuts this year as the U.S. economy remains strong. Montgomery Koning said the market tends to overreact in expectations of rate cuts.