The probability of Fed cutting interest rates by 50 basis point in Sept is 32.5% after the probability of the Fed cutting interest rates by 25 basis points in September was 67.5%, as per the current FedWatch Tool figures.
The interest cut rates are estimated on various factors and with the dollar trading near the lowest in more than a year against the Euro and Sterling on Thursday and the weak job market, interest rate cuts of 50 basis point becomes more probable.
The dollar index against the euro, sterling, yen and three other significant currencies, was little changed at 101.14 as of 0015 GMT. It went down further to 100.92 overnight for the first time this year.
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Meanwhile, euro was flat at $1.1154 after going high at $1.1130 on Wednesday for the first time since July 2023. Sterling showed steadiness at $1.3092 after moving to $1.31195 in the previous session, also resembling the levels witnessed in July 2023.
Last month, Fed officials were very keen on an interest rate cut at their September policy meeting. In fact, the minutes of the July 30-31 gathering released on Wednesday, stated that several of them would have even been willing to reduce borrowing costs immediately.
Additionally, a Labor Department report revealed that employers added far lesser jobs than originally reported in the year through March, signifying a weaker job market. The next FOMC meeting is going to be held on 18 September.
Also Read: Fed’s Dovish Stance Doesn’t Lift Crypto; Markets Wary of ETH ETF Outflows
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