US DOLLAR INDEX FALLS TOWARD 102.00 AS DOVISH FEDSPEAK RAISES ODDS OF A FED RATE-CUT
- The US Dollar Index extends its losses following the dovish comments from Fed officials.
- San Francisco Fed President Mary Daly emphasized that the US central bank should reduce rates gradually.
- The decline in the US yields contributes to the weakening of the Greenback.
The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against other six major currencies, extends its losses for the second successive day, hovering around 102.10 during the Asian hours on Monday.
The US Dollar continues to weaken following dovish comments from Federal Reserve (Fed) officials, which have increased expectations for an interest rate cut by the central bank in September. Furthermore, last week’s US economic data revealed that both the Producer Price Index (PPI) and Consumer Price Index (CPI) suggest that inflation is easing.
Federal Reserve Bank of San Francisco President Mary Daly stressed on Sunday that the US central bank should adopt a gradual approach to lowering borrowing costs, according to the Financial Times. Daly countered economists' concerns that the US economy is facing a sharp slowdown that would warrant rapid interest rate cuts.
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