US dollar perks up as traders reduce bets on larger Fed rate cut
Federal Reserve interest rate cut next week.
The greenback rose for the first time in five sessions versus the Japanese currency, while rising for a second straight day against the euro.
U.S. rate futures have fully priced in a 25-basis-point rate cut at the Fed's Sept. 17-18 policy meeting, with a roughly 29% chance of a bigger, half-percentage-point move, according to LSEG calculations. On Friday, pricing for the bigger cut rose as high as 50%.
For 2024, traders expect 113 bps of easing, up from around 100 bps.
«I think the Fed is going to cut by 25 (basis points) next week. There could be a jumbo rate move of 50 in November depending on the inflation data that comes out. But the latest information on growth shows the economy is doing okay: it's definitely slowing and moderating,» said Amo Sahota, executive director at Klarity FX in San Francisco.
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«It would be too harsh to say that the economy is collapsing, or in

