DXY: The size of the Fed first cut doesn’t matter much – DBS

FXStreetSep 17, 2024 3:07 PM

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The Dollar Index (DXY) depreciated a third session by 0.4% to 100.76, approaching 100.55, the year’s weakest close on August 27, DBS FX strategist Philip Wee notes.

The Fed’s rate cut trajectory matters more

“The futures market has increased the probability of a 50 bps rate cut at the September 18 FOMC meeting to 170% from 118% last Wednesday. Over the same period, the US Treasury 2Y yield eased by 9.1 bps to 3.551%, while the 10Y yield fell 3.6 bps to 3.618%.”

“Conversely, economists polled by Bloomberg expect the Fed to mirror its peers and commence with a 25 bps reduction.”

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