The US dollar continues to rise slightly, ignoring market expectations of about three Fed rate cuts

Odaily The US dollar rose slightly for the second consecutive trading day, completely disregarding market pricing that suggests the Federal Reserve will cut interest rates about three times this year. Options markets indicate that the recent bearish sentiment towards the US dollar has eased, with the so-called front-end risk reversal indicator falling to its lowest negative level in nearly a month. The money market still expects the Fed to cut rates by approximately 64 basis points by the end of the year. Some strategists believe this expectation is excessive, as three rate cuts may exceed the reasonable range supported by data, which could expose the market to the risk of a US dollar rebound. Elias Haddad, Global Head of Market Strategy at Brown Brothers Harriman, stated: "Expectations for Fed rate cuts seem somewhat excessive, providing room for the US dollar to strengthen in the short term." He noted that economic growth remains robust, and inflation has consistently stayed above the Fed's 2% target. (Jin10)