Live Updates > Live Update Details
2025-09-16 17:07:21
Has a soft dollar cycle begun? Risk assets face pressure, while non-US currencies see a boost. (1) Institutions believe the US dollar is likely to remain relatively weak. The dollar showed signs of weakness at the beginning of this week, likely due in part to market positioning ahead of the expected Fed rate cut this week. The dollar's weakness also benefited from a stable external environment, with global stock markets continuing to rise on the back of corporate optimism and the prospect of lower core borrowing costs. (2) This situation typically reduces investor demand for the safe-haven dollar, as capital flows into riskier assets and non-US dollar markets. Data shows that the steady rise in global stock markets and expectations of lower interest rates have created a favorable environment for non-US assets. (3) Tuesday's focus will be on US retail sales data. If the data falls short of expectations, it could further reinforce market expectations of a Fed rate cut, leading to further weakness in the US dollar and providing further upward momentum for non-US currencies like the euro. This could have a subtle impact on investor sentiment, with some seeking higher returns in riskier assets.
