Dollar Index Drops Below 101 as Fed's Rate Cut Fuels Mixed Sentiment

Services

Option Trading with CA Abhay

Stock Market Masterclass

FNO Stocks with CA Abhay

Equity Investment with CA Abhay

Equity Trading with CA Abhay

Dollar Index Drops Below 101 as Fed's Rate Cut Fuels Mixed Sentiment

Team FS

19/Sep/2024

What's covered under the Article:

Dollar index weakens to below 101, reversing earlier session gains amid Fed policy updates.

Fed's 50bps rate cut raises questions about future policy pace, according to Powell.

Investors express concerns over potential easing by other major central banks.

On Thursday, September 19, 2024, the dollar index weakened again, dropping below 101, reversing the gains seen earlier in the session. This decline reflects ongoing investor reassessment of the implications stemming from the Federal Reserve's recent policy decision. The Fed delivered an aggressive 50 basis point rate cut, marking its first reduction since the early days of the Covid pandemic.

In its latest statement, the central bank expressed confidence that inflation is trending sustainably towards 2% and emphasized its commitment to preventing a slowdown in the labor market. However, during a press conference, Chairman Powell noted that the central bank is not in a rush to ease policy further, stating that these half-percentage point cuts should not be viewed as the "new pace."

Powell's comments initially led traders to buy the dip on the dollar, temporarily boosting its value. However, the greenback gradually erased those gains as concerns mounted that other major central banks might adopt a less aggressive approach to easing monetary policy compared to the Fed. This uncertainty has prompted investors to reconsider their positions in the currency market, reflecting a broader sentiment of caution.

As traders digest the implications of the Fed's actions and Powell's remarks, the dollar's future trajectory remains uncertain. Analysts will closely monitor upcoming data and central bank statements for further clues on global monetary policy direction.

For ongoing updates and insights into market trends, stay connected with our reports.

Join our Trading with CA Abhay Telegram Channel for regular Stock Market Trading and Investment Calls by CA Abhay Varn - SEBI Registered Research Analyst & Finance Saathi Telegram Channel for Regular Share Market, News & IPO Updates.

Start your Stock Market Journey and Apply in IPO by Opening a Free Demat Account in Choice Broking FinX.

Services

Dollar Index Drops Below 101 as Fed's Rate Cut Fuels Mixed Sentiment

Related News