The US dollar weakened in trading on Monday (September 15th), as investors remained cautious ahead of a crucial week filled with central bank decisions, particularly from the Federal Reserve (The Fed). The Dollar Index (DXY), which measures the greenback's performance against six major currencies, fell slightly after previously strengthening.
Market participants are now focusing on this week's Federal Open Market Committee (FOMC) meeting. Expectations are strong that the Fed will cut interest rates by 25 basis points, a move deemed necessary to stimulate economic growth amid signs of a labor market slowdown. This expectation is pressuring the dollar because lower interest rates tend to make dollar-denominated assets less attractive to global investors.
The dollar's movement had a direct impact on gold prices, which weakened slightly due to the strengthening greenback. Meanwhile, other major currencies, such as the euro and the pound sterling, received limited support, as investors remained cautious ahead of the release of inflation data and monetary policy decisions by their respective central banks. The Japanese yen also strengthened slightly, although fundamental pressures remain.
Going forward, the dollar's direction will be largely determined by the outcome of the Fed meeting. If a rate cut is indeed announced, the dollar could potentially weaken further. However, if the Fed signals greater caution or delays the cut, the greenback could strengthen again. Investors will also be closely monitoring the latest inflation data and statements from Fed officials regarding the US economic outlook.
source; Newsmaker.id
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