Dollar’s Downward Drift: Still a Bit of a Rollercoaster
The U.S. dollar continued its slide, even though it found a momentary springboard early in the European trading week. Folks at the front‑end table are lining up for a 25‑basis‑point punch from the Fed in September, and the odds are pointing to a total of three cuts before the year wraps up.
Why the Fed’s Buzz Matters
- Powell’s upcoming words—the Fed Chair will be speaking at the Jackson Hole symposium, and everyone’s hoping he’ll spill the beans on where rates are headed next.
- Dollar index hits a low—the index is down to the lowest levels seen since April, making the currency a victim of the looming “less interest, less dollar” logic.
- Other big currencies like the euro and the pound could capitalize on this slide, especially if their own central banks play it slow with rate cuts.
Possible Shifts Ahead in the US Economy
Fear of a weaker PMI (Purchasing Managers Index) at both the manufacturing and services end could push the dollar even lower. This might also drum a dent into U.S. Treasury yields, nudging investors to rethink their plays.
Bottom Line (and a dash of sentiment)
In a nutshell, the dollar’s march down the scale feels persistent, but there’s still a glimmer of hope that it might wobble back into a steadier groove. Traders love a gamble, and the seeming tug-of-war between monetary tightening and easing keeps everyone on their toes.
