As early Tuesday trading gets underway, the US dollar is continuing its retreat from the highs reached earlier in the month. Market expectations over the path of the Federal Reserve’s tightening plan appear to have somehow shifted, as fresh economic data points at an incoming slowdown in activity.
With commodity prices falling and recession fears growing, some now believe that the Fed will not be able to go as far as previously expected, in terms of tightening, in a dynamic that is shifting expectations towards a slightly lower benchmark US rate than had previously been expected, creating scope for further dollar weakness.
Ricardo Evangelista – Senior Analyst, ActivTrades
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