USD falls on “dovish” comments from Fed

The dollar edged lower on Monday as investors assessed dovish comments from Fed officials, reinforcing expectations of a rate cut next month.

Despite falling against major currencies, the dollar rose against the Japanese yen, as investors continued to watch for signs that Tokyo could intervene to buy to stem the decline in the local currency.

Trading volumes were generally lower than usual as Japan was closed for a holiday and US markets entered a "light" trading week ahead of the Thanksgiving holiday on Thursday.

In afternoon trading, the euro rose 0.1% against the dollar to 1.1526 USD while against the Swiss franc, the dollar fell 0.1% to 0.8079 franc. The dollar index fell 0.1% to 100.15.

The Japanese yen fell against the dollar after rising 0.2 percent to 156.755 yen, just off a 10-month peak of 157.90 set last week.

The US dollar continued to decline slightly after Fed Governor Christopher Waller said on Monday that available data showed the US labor market was still weak enough for the US Federal Reserve (Fed) to cut interest rates by another 0.25 percentage points at its policy meeting on December 9-10.

The comments follow comments from New York Fed President John Williams on Friday, who said the Fed could still cut interest rates “in the near term” without risking its inflation target.

Following the Fed officials' comments, the odds of the Fed cutting interest rates by 0.25 percentage points next month rose to 80%, from 30% previously, according to CME's FedWatch tool.

Quang Trung

Source: https://baoninhbinh.org.vn/usd-giam-do-binh-luan-on-hoa-tu-fed-251125052649136.html