The US dollar index fell clearly during trading today, Wednesday, in conjunction with weak demand for the US currency as a result of strengthening market expectations about a US interest rate cut, as well as the negative of some economic data that raised concerns about the recession of the US economy.
The following are the most important influences on dollar movements:
Falling US bond yields hurt dollar index
The US dollar index fell clearly in conjunction with the weakness of US bond yields of various maturities, as the yield of 10-year US bonds fell by 1.45% to about 3.786%. The 20-year bond yield fell by 1.07% to 4.168%. Also, the US 30-year bond yield fell by 1% to 4.089%, and this strong drop in bond yields had a negative impact on dollar movements.
Dollar Falls on Negative U.S. Economic Data
Also, the dollar fell clearly as a result of the negative of some US economic data, led by labor market data, as the US Labor Office released today, Wednesday, vacancy data and labor turnover for the month of July, which came out negative and much worse than market expectations.
According to the data, vacancies and turnover fell to 7.67 million jobs by the end of July, which was lower than expectations that it was likely to decline to only 8.09 million jobs, noting that the previous reading for June recorded 7.91 million jobs, and this negative data damaged the dollar index.
Strengthens expectations of a US interest rate cut increases pressure on the dollar
According to the FedWatch tool, the odds of a US interest rate cut by 0.25% during the next September meeting reach 53%, while the chances of a US rate cut by 0.50% reach 47%, and these expectations about the US interest rate cut during the next US Federal Reserve meeting cast a negative shadow on the performance of the dollar index.
How has the dollar index been affected by these developments?
The US dollar index fell clearly affected by these developments, and settled near the levels of 101.26 points, the lowest level in several days, specifically since August 29, and the release of US labor market data is expected this week.
Read also:Widespread price collapse hits cryptocurrencies and panic spreads in the market
What stock should you buy in your next trade?
With stock valuations soaring in 2024, many investors feel uncomfortable investing more money in stocks. Not sure where to invest your money now? Check out our proven portfolios and discover high-potential investment opportunities.
In 2024 alone, ProPicks’ AI identified two stocks that jumped more than 150%, 4 more that jumped more than 30%, and another 3 that rose more than 25%. This is an impressive record.
With portfolios specifically designed to follow Dow Jones, S&P, technology and mid-cap stocks, you can explore various wealth building strategies.
