ANALYSIS: Fed to leave door open for rate cuts
On 1 August, Philip Wee, FX analyst at DBS Bank, noted that the dollar index was virtually unchanged at 104.07 ahead of today's FOMC meeting. In the overnight session, the dollar touched 104.80, close to the level it fell to on 11 July on softer US CPI inflation.
The Fed should be open to a rate cut until it sees US unemployment data on 2 August and CPI data on 14 August, without supporting the market's aggressive bets (110% probability) for a September rate cut.
Assuming the Fed's confidence in inflation falling back towards its 2% target increases, or concerns about rising unemployment increase, it may provide forward guidance on the timing of a rate cut at the Jackson Hole Symposium on 24-26 August.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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