The dollar weakened against its rivals on Tuesday, heading back toward a recent three-month low before a U.S. Central Bank meeting gets underway with expectations growing the Fed will signal its first rate cut in a decade. A CME Fedwatch tool puts the probability of a quarter-point interest rate cut by the Fed at 20 per cent, with a 70 per cent probability of a rate cut at its next meeting in July. “The majority view among the Fed comments does not suggest any particular appetite for an immediate rate cut in June or July,” HSBC strategists said in a note. While hedge funds have pared back some of their long positions on the dollar in recent weeks, overall net positions remain near 2019 highs. With benchmark interest rates in the eurozone already in negative territory and inflation expectations below central bank forecasts, financial markets will be closely watching Draghi’s comments.

Source: The Guardian June 18, 2019 09:56 UTC