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2025-09-16 17:05:17
[Currency Game Amidst Expectations of a Weaker US Dollar: Bulls and Bears Shift Focus to the Fed] ⑴ The US dollar index has continued to weaken recently, with the euro rising to a two-and-a-half-month high of 1.18 against the dollar, reflecting market caution regarding the dollar's outlook and potentially challenging its year-to-date high of 1.1830. ⑵ The market generally expects the Federal Reserve to cut interest rates at its meeting on Wednesday, further weakening the dollar's appeal. The recent record-breaking US stock market confirms investors' optimistic expectations for the Fed's easing policy. ⑶ However, market expectations for a "dovish" Fed may be overstated. If the Fed fails to deliver the 68 basis point rate cut expected by the market curve, this could lead to a repeat of the volatility seen in 2024 in US Treasury yields, introducing new uncertainty into the market. ⑷ Closely monitor the Fed's policy announcement, wary of potential dollar rebounds and market risks if a "dovish surprise" is not delivered.
