The US dollar hovered near its lowest level in over a year against a basket of currencies on Wednesday, while the British pound remained close to multi-year highs, as markets looked for signals about the size of a widely expected U.S. interest rate cut next month.
Cryptocurrency Bitcoin took the spotlight in Asia, dropping over 4% after breaking below support around $60,000, News.Az reports citing Reuters.
The Australian dollar rose to an eight-month high after data showed domestic inflation slowed to a four-month low in July, but the general progress on tempering price gains disappointed. It was last flat at $.06793.
Investors are unanimous in bets that the Federal Reserve will begin cutting interest rates next month following Chair Jerome Powell’s dovish tilt last week, with the debate now centred on whether or not it will be a super-sized 50-basis point cut.
The current pricing sits at a 36% chance for the larger cut, up from 29% a week ago, according to the CME Group’s FedWatch Tool.
Markets, which are fully priced for a 25-basis point cut next month, see just over 100 basis points worth of easing by the end of the year.
The dollar index , which measures the greenback against a basket of currencies, was last 0.2% higher at 100.78, hovering above a 13-month low of 100.51 hit in the previous session.
For the month, the dollar has fallen 3.4%, putting it on track for its biggest monthly decline since November 2022.
But given markets have been pricing in easing from September for weeks now, downside momentum on the dollar appears to be waning, with support built up around 100.18/30, Simpson said.
Sterling ticked down 0.14% to $1.3243 after hitting its highest since March 2022 against the greenback at $1.3269 on Tuesday.
The euro slid 0.24% to $1.1156, but was sitting not far from a 13-month peak touched at the top of the week.
The yen edged further off Monday’s three-week high of 143.45 against the greenback, and was last 0.23% lower at 144.33 per dollar.
The New Zealand dollar dipped 0.1% to $0.6246. In cryptocurrencies, bitcoin was last down 4.1% at $59,329 after sliding over 6% earlier in trade.
