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Rate cut forecast push the dollar lower to lowest level in a week

25 Feb 2020 01:12 PM

The U.S. dollar continues to fall amid speculation that the Fed will cut interest rates this year to curb downward pressures on the economy caused by the spread of coronavirus in China and several other countries.

Traders initially turned to all U.S. assets as a safe investment as the virus spread around the world, pushing the dollar higher to its highest level since April 2017, the dollar index currently stabilizing below 100 levels, and with no good news about the virus is expected to give back for a lot of its gains.

On the other hand, the euro rose significantly today to cover the price gap that began the markets this week, currently trading at 1.0860 levels, and is expected to see some correction of the single currency may target the level of 1.0940.

Traders continue to expect further easing policy with markets pricing a 25 basic points in June meeting by 46% cut, and for all 2020 markets expecting rates range to stabilize at 1%-1.25%.

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