The US Dollar (USD) is trading lower on Friday, closing out the week with a loss. The decline follows comments from former Federal Reserve Bank of New York President William Dudley, who suggested that a 50 basis point (bps) rate cut at the upcoming Fed meeting remains a possibility.
Economic Data
The US Import/Export prices and University of Michigan Consumer Sentiment data are due for release today. However, significant market movement is unlikely unless the consumer sentiment data comes in well below expectations.
Fed Rate Expectations
The CME Fedwatch Tool shows a significant increase in the probability of a 50 bps rate cut, rising to 43% from 13% a day ago. This follows Dudley’s comments and news articles suggesting the possibility of a larger rate cut.
Market Outlook
Asian equities closed lower on Friday, while European equities rallied on expectations of a larger ECB rate cut. US futures are relatively flat.
US Dollar Technical Analysis
The US Dollar Index (DXY) is trading near the lower band of its trading range. A break below 100.62 could signal a potential downtrend.
