The US dollar is weakening ahead of today’s presidential election debate and ahead of Wednesday’s key inflation data in the United States. This is despite the fact that both events are unlikely to affect overall monetary policy, Reuters wrote. Against the yen, the dollar lost 0.4 percent to JPY142.59 shortly before 17:30 CET.
US Federal Reserve Expected to Cut Interest Rates
The US Federal Reserve (Fed) is expected to cut interest rates next week for the first time in more than four years. According to LSEG’s calculations, the rate is 73 percent likely to fall by a quarter percentage point and 27 percent likely by half a percentage point. The odds of a half-point cut rose to 50 per cent last Friday after investors received the US labour market report with mixed feelings.
“The markets are waiting ahead of tomorrow’s CPI, but there is a bit of treacle in the air today from election nerves and Chinese economic sentiment,” said analyst Helen Given at Monex USA in Washington.
China’s imports fell short of expectations in August, rising only 0.5 percent, Chinese statisticians said today. Moreover, inflation was lower than expected, according to data released Monday, pointing to still weak domestic demand. The Chinese yuan weakened slightly against the dollar in response.
Currency Market Reactions
The dollar index, which tracks the dollar’s performance against a basket of six leading world currencies, added 0.1 percent to 101.67 points at the same time. The euro depreciated 0.1 percent to $1.1026. Against the Swiss franc, the dollar lost 0.3 percent. Investors’ attention is also focused on tonight’s televised presidential debate between Republican candidate Donald Trump and his opponent, Democratic vice presidential nominee Kamala Harris. Analysts expect the dollar to strengthen if Trump does better in the debate.
Source: čtk
