Dollar Hits Five-Week Lows as Fed Hints at September Rate Cut, While Cryptocurrencies Soar
The dollar lingered around five-week lows with market expectations growing for a September rate cut after Federal Reserve Chair Jerome Powell's comments on inflation. Simultaneously, cryptocurrencies gained value, buoyed by the rising likelihood of Donald Trump's reelection. Market dynamics and intervention from Japanese authorities also influenced currency values.
The dollar lingered around five-week lows on Tuesday, bolstered by Federal Reserve Chair Jerome Powell's remarks supporting the case for a rate cut in September. Meanwhile, cryptocurrencies saw gains amid increasing odds of Donald Trump's reelection.
Powell's statements on Monday suggested that recent U.S. inflation readings are in line with the Fed's target, reinforcing rate cut speculations. Markets now expect 68 basis points of easing this year, with a September cut seen as likely, according to the CME FedWatch tool. The euro edged down to $1.0893, as sterling settled at $1.2967. The dollar index hovered near its one-month low at 104.
In other movements, the yen weakened following suspected Japanese market intervention, and cryptocurrencies like bitcoin and ether climbed on strengthened expectations of Trump's presidential win. Concurrently, the Australian and New Zealand dollars dipped against the greenback.
(With inputs from agencies.)
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