US Dollar: Faces renewed downside risk – Commerzbank
Commerzbank’s Volkmar Baur notes that the US Dollar (USD) has weakened against the Euro (EUR) as markets steadily scale back expectations for further Federal Reserve (Fed) tightening relative to other G10 central banks.
Commerzbank's Volkmar Baur has identified renewed downside risk for the US Dollar (USD) as market expectations for further Federal Reserve (Fed) tightening have diminished relative to other G10 central banks. Since December, enhanced US rate expectations have bolstered the Dollar, but the recent shift and Commerzbank's prediction of three US rate cuts next year indicate a resurgence of Dollar weakness.
Over the past two weeks, market forecasts for the Fed have significantly increased, contrasting sharply with the rest of the G10. This divergence has previously supported the USD, but a continuing trend of reduced Fed tightening expectations could reinvigorate Dollar pressure.
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