© Reuters. By Yasin Ebrahim
Investing.com – It gained’t be lengthy till the greenback shakes off its post-Federal Reserve slumber as calls on a dovish Fed pivot are too early and weakening within the world economic system will proceed to bitter sentiment on threat property.
The , which measures the dollar in opposition to a trade-weighted basket of six main currencies, fell by 0.30% to 106.02.
“Wanting on the coming weeks, our view is that the post-FOMC greenback weak spot might begin to fade fairly quickly,” ING mentioned in a be aware.
The economic system declined by 0.9% within the , the Commerce Division mentioned in its first estimate on Thursday, confounding estimates for a 0.5% enhance.
The weaker economic system knowledge reignited the ‘dangerous information is sweet information’ response in threat property amid expectations {that a} wobble within the economic system will pressure the Fed to rethink its strategy to front-load fee hikes.
Treasury yields added to losses from a day earlier, pressuring the dollar to slip deeper within the purple.
The Fed hiked charges by 0.75% on Wednesday but in addition teed up expectations for a slower tempo of tightening after the September assembly to evaluate the influence of fee hikes on inflation and the economic system.
Bets on the Fed pivoting to a much less hawkish stance, ING provides, might show too early and “markets ought to retain most greenback longs till the Fed is giving clearer alerts that it’s pivoting to a much less hawkish stance.”
Morgan Stanley seems to agree and factors to a Fed that may doubtless stay “hyper-focused on preventing inflation, regardless of indicators of weaker progress.”
