Dollar Dismay: Markets Fail to Account for Fed's Shift in Policy
The U.S. dollar is hovering around 99.60 despite weak economic data and expectations of a dovish pivot in Federal Reserve policy.
The dollar index edged lower on Wednesday, currently trading near 99.60 as the market continues to digest recent weak data and Fed policy expectations.
Geopolitical risks have pushed up global bond yields, providing some support for the U.S. dollar, but market expectations for a September rate hike have declined significantly, limiting the overall momentum for a dollar rebound.
Market pricing indicates that the probability of a 25-basis-point rate hike in September has shifted from nearly 50-50 to a roughly 70% likelihood of the Fed holding rates steady, according to the Head of Structured Products for North America at Moneycorp.