The US dollar fell in the European market on Monday against a basket of major and minor currencies, deepening its losses for the second consecutive day, hitting a 13-month low, as the sell-off of the US currency continued, after Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole Economic Forum.
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Powell’s comments were more pessimistic than expected, emphasizing the imminent start of the monetary easing cycle in the United States, raising the likelihood of deep cuts in US interest rates before the end of this year.
Price outlook • US Dollar Index Price Today: The dollar index fell by 0.15% to (100.53) points, the lowest since July 2023, from the opening level of today’s trading at (100.68) points, and recorded the highest level at (100.75).
• The index ended Friday’s trading down 0.85%, in the fifth loss in the last six days, with the exit from the US currency continuing as the best available investment.
• The US dollar index lost 1.7% last week, in the fifth consecutive weekly loss, and the largest weekly loss in 2024, specifically since November 2023, due to the acceleration of open selling.
US Bond YieldThe yield on the ten-year US Treasury bond fell on Monday by 0.7 percentage points, extending losses for the second consecutive session, on track to record the lowest level in several weeks, which is negatively pressuring the levels of the US dollar.
This development in the US bond market follows Federal Reserve Chairman Jerome Powell’s speech at the Jackson Hole Economic Forum, during which he supported the imminent start of monetary policy easing and cutting US interest rates.
Federal Reserve Chairman Jerome Powell said on Friday: “It’s time to adjust monetary policy. Powell added: “My confidence has increased that inflation is on a sustainable path to return to the target of 2%.
Powell stressed that we do not seek and do not welcome a further slowdown in labor market conditions, and Powell explained: The current interest rate level gives ample scope to respond to risks, including more unwanted weakness in the labor market.
Jerome Powell said: “The slowdown in the labor market is unequivocal, we are no longer overactive.Powell added: “Inflation has dropped significantly, and we are now much closer to the target.
Powell explained: “The balance of risks that threatens our states has changed. Bullish risks to inflation have diminished, and downside risks to employment have increased.
According to CME Group’s FeedWatch, the pricing of US interest rate cut prospects rose by about 50 basis points at the September meeting from 25% to 38%, and the pricing of cut prospects fell by about 25 basis points from 75% to 62%.
• According to interest rate futures, markets are currently pricing for cuts of about 100 basis points in US interest rates before the end of this year.
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