The US dollar has taken a hit after the Federal Reserve’s latest economic projections indicated that the interest-rate hike cycle has come to an end and lower borrowing costs are coming in 2024 . The Bloomberg Dollar Spot Index fell for a fifth day as fears of a recession and dovish Fed commentary spurred investors to wager the central bank will have to reverse its most aggressive tightening cycle since the 1980s .
The US dollar has fallen to a four-month low after the Federal Reserve’s latest economic projections indicated that the interest-rate hike cycle has come to an end and lower borrowing costs are coming in 2024 . The dollar slid to the weakest level since early August as swap traders ramp up bets the Federal Reserve will cut interest rates as early as May.
The dollar remains vulnerable until we see a shift in market expectations for the Fed and that may be a 2024 story. With the dollar rally stalled, it will take some firm real sector data to challenge the current dovish Fed narrative.
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