Dollar drops as Fed cuts rates by half a percentage point
Corrects to yuan strengthened versus dollar instead of yuan down in paragraph 8
By Karen Brettell and Chibuike Oguh
NEW YORK, Sept 18 (Reuters) -The dollar dropped after the Federal Reserve on Wednesday cut interest rates by half a percentage point, citing greater confidence that inflation will continue to recede to the U.S. central bank's 2% annual target.
The Fed cut the overnight rate to the 4.75%-5.00% range and policymakers see the Fed's benchmark rate falling by another half of a percentage point by the end of this year, another full percentage point in 2025, and by a final half of a percentage point in 2026 to end in a 2.75%-3.00% range.
The dollar index =USD was last down 0.53%on the day at 100.37,the lowest since July 2023. The euro EUR=EBS gained 0.55%to $1.117575. The greenback weakened 1.07% to 140.825 Japanese yen JPY=EBS.
"It's a more dovish cut. It certainly wasn't a hawkish cut," said Vassili Serebriakov, FX & macro strategist at UBS in New York.
"The way we thought about it before the announcement is that you know a 50-basis point cut is dollar negative. If they had cut by 25 bps, there were different scenarios where the dollar could perform. But a 50-basis point cut is unambiguously dollar negative."
Following the Fed's rate move, futures on the fed funds rate, which measures the cost of unsecured overnight loans between banks, have priced in about 72 basis points of more rate cuts this year.
A closely watched part of the U.S. Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes US2US10=RR, seen as an indicator of economic expectations, hit its steepest level since July 2022 following the Fed's cut. It was last at 7 basis points.
Sterling GBP=D3, the best performing G10 currency of the year, rose 0.84% at $1.32730. The yuan CNY=CFXS strengthened against the dollar at 7.0761 per dollar in offshore trading.
"The market was pretty much 50-50 going into the decision. So it surprises obviously half the market," said Brad Bechtel, global head of FX at Jefferies in New York. "And clearly the Fed is trying to get out in front of the slowdown in the US economy and provide support. But so far, the reaction in the market isn't overly crazy."
Currency bid prices at 18 September 07:00 p.m. GMT | |||||||
Description | RIC | Last | U.S. Close Previous Session | Pct Change | YTD Pct | High Bid | Low Bid |
Dollar index | =USD | 100.62 | 100.91 | -0.28% | -0.74% | 100.96 | 100.21 |
Euro/Dollar | EUR=EBS | 1.1145 | 1.1115 | 0.27% | 0.96% | $1.1189 | $1.1108 |
Dollar/Yen | JPY=D3 | 141.19 | 142.42 | -0.82% | 0.15% | 142.28 | 140.53 |
Euro/Yen | EURJPY= | 1.1145 | 158.24 | -0.54% | 1.13% | 158.26 | 157.06 |
Dollar/Swiss | CHF=EBS | 0.8433 | 0.8472 | -0.47% | 0.2% | 0.8467 | 0.8392 |
Sterling/Dollar | GBP=D3 | 1.3242 | 1.3163 | 0.64% | 4.09% | $1.3298 | $1.3157 |
Dollar/Canadian | CAD=D3 | 1.3575 | 1.3599 | -0.17% | 2.41% | 1.3608 | 1.3541 |
Aussie/Dollar | AUD=D3 | 0.6781 | 0.6756 | 0.43% | -0.49% | $0.682 | $0.675 |
Euro/Swiss | EURCHF= | 0.94 | 0.9414 | -0.15% | 1.23% | 0.9416 | 0.9382 |
Euro/Sterling | EURGBP= | 0.8415 | 0.8444 | -0.34% | -2.92% | 0.8453 | 0.8405 |
NZ Dollar/Dollar | NZD=D3 | 0.6229 | 0.6187 | 0.69% | -1.35% | $0.6268 | 0.6184 |
Dollar/Norway | NOK= | 10.5649 | 10.5945 | -0.28% | 4.24% | 10.6202 | 10.478 |
Euro/Norway | EURNOK= | 11.7742 | 11.7919 | -0.15% | 4.9% | 11.8138 | 11.7172 |
Dollar/Sweden | SEK= | 10.1726 | 10.189 | -0.16% | 1.05% | 10.2196 | 10.106 |
Euro/Sweden | EURSEK= | 11.34 | 11.3237 | 0.14% | 1.93% | 11.3534 | 11.3012 |
Reporting by Karen Brettell and Chibuike Oguh in New York; Editing by Lisa Shumaker and Diane Craft
Aset Terkait
Berita Terbaru
Pengungkapan: Entitas XM Group menyediakan layanan khusus eksekusi dan akses ke Fasilitas Trading Online kami, yang memungkinkan Anda untuk melihat dan/atau menggunakan konten yang tersedia pada atau melalui situs, yang tidak untuk mengubah atau memperluas, serta tidak mengubah atau memperluas hal tersebut. Akses dan penggunaan ini selalu sesuai dengan: (i) Syarat dan Ketentuan; (ii) Peringatan Risiko; dan (iii) Pengungkapan Penuh. Oleh karena itu, konten disediakan hanya sebagai informasi umum. Anda juga harus ketahui bahwa konten Fasilitas Trading Online kami bukan sebagai ajakan atau tawaran untuk untuk melakukan transaksi apa pun di pasar finansial. Trading di pasar finansial mana pun melibatkan tingkat risiko yang signifikan pada modal Anda.
Semua materi yang diterbitkan di Fasilitas Trading Online kami hanya untuk tujuan edukasi/informasi dan tidak boleh mengandung nasihat dan rekomendasi finansial, pajak investasi atau trading, catatan harga trading kami, penawaran, permintaan, transaksi dalam instrumen finansial apa pun atau promo finansial untuk Anda yang tidak diminta.
Konten pihak ketiga apa pun, serta konten yang disiapkan oleh XM, seperti opini, berita, riset, analisis, harga, informasi lain atau link ke situs pihak ketiga yang tersedia "sebagaimana adanya", sebagai komentar pasar umum dan bukan menjadi nasihat investasi. Sejauh konten apa pun ditafsirkan sebagai penelitian investasi, Anda harus memperhatikan dan menerima bahwa konten tersebut tidak dimaksudkan dan belum disiapkan sesuai dengan persyaratan hukum yang dirancang untuk mempromosikan kemandirian riset investasi dan dengan demikian akan dianggap sebagai komunikasi pemasaran di bawah hukum dan peraturan yang relevan. Mohon dipastikan bahwa Anda telah membaca dan memahami Notifikasi pada Riset Investasi Non-Independen dan Peringatan Risiko kami mengenai informasi di atas, yang dapat diakses disini.
