Created
: 2024.09.18
2024.09.18 20:19
A 50-basis point interest rate cut, if it were to come from the Fed tonight, would be negative for the US Dollar (USD). The Fed's reaction function is more aggressive than previously thought, and not just for today, but possibly for the future, which is USD-negative, Commerzbank's FX analyst Antje Praefcke notes.
"Since the majority has already settled on 50 basis points, a 25 basis point move would probably be the bigger surprise and a disappointment, so the SUD could recover some of its losses in an initial reaction. It will depend on how concerned Fed Chairman Jerome Powell is about the economic situation."
"If he is clearly concerned that a recession is looming, the market could quickly revert to its expectation of a fairly aggressive rate cut cycle in the coming months, putting the dollar under pressure again. Only if Powell appears confident that the economy will hold up fairly well, the USD is likely to defend its position or even strengthen a little."
"I am not very confident that Powell would even be able to dispel the market's concerns. To do that, he would have to sound very positive, which at this point in time and given the data dependency of further interest rate decisions, he can hardly be. All in all, I therefore expect that any gains made by the dollar after a 25 basis point move will probably only be short-lived."
Created
: 2024.09.18
Last updated
: 2024.09.18
FXStreet is a forex information website, delivering market analysis and news articles 24/7.
It features a number of articles contributed by well-known analysts, in addition to the ones by its editorial team.
Founded in 2000 by Francesc Riverola, a Spanish economist, it has grown to become a world-renowned information website.
We hope you find this article useful. Any comments or suggestions will be greatly appreciated.
We are also looking for writers with extensive experience in forex and crypto to join us.
please contact us at [email protected].
Disclaimer:
All information and content provided on this website is provided for informational purposes only and is not intended to solicit any investment. Although all efforts are made in order to ensure that the information is correct, no guarantee is provided for the accuracy of any content on this website. Any decision made shall be the responsibility of the investor and Myforex does not take any responsibility whatsoever regarding the use of any information provided herein.
The content provided on this website belongs to Myforex and, where stated, the relevant licensors. All rights are reserved by Myforex and the relevant licensors, and no content of this website, whether in full or in part, shall be copied or displayed elsewhere without the explicit written permission of the relevant copyright holder. If you wish to use any part of the content provided on this website, please ensure that you contact Myforex.
Myforex uses cookies to improve the convenience and functionality of this website. This website may include cookies not only by us but also by third parties (advertisers, log analysts, etc.) for the purpose of tracking the activities of users. Cookie policy