Analysts at PIMCO have issued a note with what’s ahead for the US dollar as the US Federal Reserve begins it rate cut cycle.
They highlight that since the 1990s, the dollar has typically weakened, albeit temporarily, following initial rate cuts by the Federal Reserve. And add that during previous cycles of monetary easing, whether leading to hard or soft landings, the US dollar has generally declined but rebounded in the months after the first rate cuts
And conclude that as monetary policy returns to normal, there’s a chance that the dollar could lose its position as a high-yielding currency, potentially leading to moderate depreciation.
This article was written by Eamonn Sheridan at www.forexlive.com. Source