The US dollar continues to rise slightly, ignoring market expectations of about three interest rate cuts by the Federal Reserve

Odaily Planet Daily News: The US dollar has risen slightly for the second consecutive trading day, completely ignoring market pricing that suggests the Federal Reserve will cut interest rates about three times this year. The options market shows that recent bearish sentiment on the dollar has eased, with the so-called front-end risk reversal indicator dropping to its lowest negative level in nearly a month. The currency market still expects the Federal Reserve to cut rates by approximately 64 basis points by the end of the year. Some strategists believe this expectation is excessive, as three rate cuts may exceed what the data reasonably supports, which could pose a risk of a dollar rebound. Elias Haddad, Global Head of Market Strategy at Brown Brothers Harriman, stated, “The expectation of rate cuts by the Federal Reserve seems a bit overdone, which provides room for the dollar to strengthen in the short term.” He pointed out that the economic growth outlook remains solid, and inflation levels have been consistently above the Fed’s 2% target. (Jin10)