Dollar down further on rates speculation

investmentnews.com:

The dollar extended a decline, with a gauge of greenback strength hitting its lowest level since August, amid speculation the Federal Reserve is nearing the end of its rate-hike cycle.

Traders are currently pricing in about a 30% chance of a first Fed rate cut in March following cool inflation data last week. Investors are awaiting publication Tuesday week of minutes of the last Fed rates meeting for further insight into policy makers’ thinking.

“The dovish Fed narrative remains in place,” said Win Thin, global head of currency strategy at Brown Brothers Harriman & Co. “There is likely to be ongoing downward pressure on US yields and the dollar.”

US equity futures were steady after a three-week stock rally that propelled the S&P 500 to an 11-week high. Microsoft Corp. climbed more than 2% in pre-market trading after appointing Sam Altman, the OpenAI co-founder ousted from his startup last week, to lead its in-house artificial intelligence team. Treasury yields edged higher ahead of a US 20-year auction.

The Stoxx Europe 600 index fluctuated as a slew of negative corporate news weighed on shares.

Bayer AG slumped more than 10% after the German pharmaceutical giant stopped a key drug trial and suffered a defeat in a trial related to its Roundup weed killer. Ashtead Group Plc plunged after the UK equipment-rental company cut its revenue forecasts. Julius Baer Group Ltd. fell as much as 9.6% after the Swiss bank warned of a profit decline amid rising bad-loan provisions.

Moody’s Lifts Italy

Italian banks rallied after Moody’s Investors Service lifted its outlook on the country’s debt to stable, removing the immediate threat of a downgrade to junk. Italy’s yield premium over German bonds narrowed.

Meanwhile, European natural