Asia FX firms, dollar sinks on bets of no more Fed rate hikes
Investing.com-- Most Asian currencies strengthened on Thursday, while the dollar fell sharply after mixed signals from the Federal Reserve ramped up bets that the central bank will not raise interest rates further.will raise interest rates when it meets next week, bringing them closer to U.S. levels and making the Aussie appear more attractive.jumped 0.5%, recovering sharply from a one-year low as government officials continued to threaten intervention in currency markets.
Powell still left the door open to one more hike. But markets took his comments as a sign that the Fed was done with its run of rate hikes, and was likely to cut rates by mid-2024. But even if the Fed doesn’t hike rates further, they are expected to remain above the 5% level until at least end-2024. This presents limited upside for Asian currencies, most of which are nursing steep losses this year due to pressure from rising U.S. rates.data, due Friday. Any signs of a cooling labor market are likely to give the Fed more impetus to keep rates on hold.
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