Dollar Struggles Amid Bond Market Volatility and Looming Fed Rate Cuts
The U.S. dollar steadied as investors face a turbulent bond market and declining job data, amplifying expectations for Federal Reserve rate cuts. Traders foresee a near-100% chance of a rate cut this month. The dollar rose slightly against other major currencies amidst concerns about global fiscal health and rising bond yields.
On Thursday, the U.S. dollar managed to stabilize in a turbulent week marked by investor anxieties over bond markets and a weakening labor sector. Notably, recent data signaling a decline in job openings has strengthened predictions that the Federal Reserve may cut interest rates this month.
Traders now believe there's almost a guaranteed chance of a rate reduction this month, an increase from last week's 89% probability. Financial markets show the dollar uptick, indicating a cautious sentiment among investors prior to the imminent payrolls report.
Economic uncertainties are further exemplified by long-term bond yields, spotlighting fiscal concerns across significant global economies, including the U.S., Japan, and Britain. Despite this, comments from Federal Reserve officials suggest that upcoming rate cuts remain likely, fueling a moderate rally in treasury markets.
(With inputs from agencies.)
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