- US Dollar Falls Despite FOMC Minutes.
- US preliminary manufacturing and services PMIs are estimated to grow steadily.
- Market sentiment is bullish amid firm Fed rate cut bets.
The USD/CHF pair falls after facing selling pressure near 0.9140 in the European session on Thursday. USD/CHF is under pressure while the US dollar falls amid strong speculation that the Federal Reserve (Fed) will begin reducing interest rates from the September meeting. Market sentiment has improved due to firm Fed rate cut prospects.
S&P 500 futures have posted significant gains in the London session, suggesting a sharp increase in investors' risk appetite. US yields have plummeted as the Fed's firm rate cut bets constitute an unfavorable scenario for them. The 10-year US Treasury yield has fallen to 4.42%.
Investors remain confident that the Fed will return to policy normalization in September, even though officials' message in the Federal Open Market Committee (FOMC) minutes was clear that interest rates will rise. They will remain stable at their current levels until they gain greater confidence that inflation will decline sustainably to the desired rate of 2%.
The reason for investors' high confidence in a rate cut is that officials' commentary was based on stubbornly high inflation in the first quarter of this year. However, the Consumer Price Index (CPI) report for April showed that price pressures eased in line with estimates.
Meanwhile, investors await preliminary US May S&P Global PMI data, due at 13:45 GMT. Manufacturing and services PMIs are estimated to remain unchanged at 50.0 and 51.3 respectively.
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.
