August 22, 2024 at 10:49PM
A summary of a note from UBS on the dollar. UBS touch on the many alternatives being offered up right now.
Fed’s July meeting minutes suggest a strong likelihood of a rate cut in September
the minutes said that most participants believe US inflation is nearing the 2% target
concerns over a slowing labor market are increasing
the BLS data on Wednesday showing hefty revisions in payrolls adds to the pressure for rate cuts
the growing US federal deficit is expected to be a major issue, regardless of the outcome of the presidential race
Congressional Budget Office projects that interest costs on US debt will surpass defense spending this year, potentially weakening the US dollar over time
The picture elsewhere:
other major central banks are expected to cut rates less aggressively than the Fed
Swiss National Bank is likely nearing the end of its rate cuts, Swiss franc anticipated to rise
Reserve Bank of Australia may not ease until next year, Australian dollar presents investment opportunity
Bank of England and the European Central Bank are also taking a more gradual approach to rate cuts, which could lead to a depreciation of the US dollar against other currencies
gold prices are anticipated to rise
This article was written by Eamonn Sheridan at www.forexlive.com.
