The broader U.S. dollar index is trading just above its 200-day moving average as it finds support from some ripples of doubt whether the priced-in “soft landing” for the U.S. economy is really achievable.
The relative U.S. interest rate outlook right now fits the weaker dollar narrative – futures markets are pricing in bigger rate cuts by the Fed next year than by any other major or emerging market central bank.
But will the Fed cut rates by 125 basis points next year? Doubts about that prospect have for now put the brakes on dollar selling. Even if the Fed does go that far, other central banks are sure to lower their policy rates by more than markets are currently predicting.
Gold, which shot to a record high in Asia’s notoriously thin morning hours on Monday, has recoiled sharply.
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/cloudfront-us-east-2.images.arcpublishing.com/reuters/GIBZQ5PEAFJ4NDUF33PXDN366M.jpg "RBA holds and the dollar pauses, too 38")
