The US Dollar (USD) fell after the FOMC meeting revealed a Fed committed to rate cuts. ING economists analyze the outlook for the dollar.
It is the beginning of a new important trend for the Dollar, if the price data in the US softens
Financial markets have reacted positively to a soft landing scenario, in which the Fed appears willing to cut rates even though the economy is doing quite well.
For the Dollar, we think this could be the start of something important. We have considered that the second quarter would be the period in which a significant downward trend in the Dollar would begin to develop before the first Fed cut..
Furthermore, seasonal factors are less favorable to the Dollar starting in April. It's a big “if,” but if March US price data starts to decline – validating the Fed's skepticism about high inflation at the beginning of the year – then we may start to see a bearish Dollar trend gaining momentum in the coming months.
We doubt that the US data will be a driving factor for the market today and see the DXY index remaining soft.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
