Dollar Weakens Against Major Counterparts On Rate Cut Hopes

(RTTNews) - The U.S. dollar dropped to a more than 7-month low on Monday, weighed down by the prospects of an interest rate cut by the Federal Reserve in September.

According to CME Group's FedWatch Tool, there is a 75.5% of a quarter point rate cut next month and a 24.5% chance of a half point rate cut.

Investors are looking ahead to the release of the minutes from the Federal Reserve's most recent policy meeting, and Fed Chair Jerome Powell's speech at Jackson Hole on Friday.

Minneapolis Fed President Neel Kashkari said that it is appropriate to debate about a rate cut in September amid "concerning signs" in the labor market.

San Francisco Federal Reserve Bank President Mary Daly noted in an interview with the Financial Times on Sunday that it is time to consider adjusting borrowing costs.

A report released by the Conference Board today showed its reading on leading U.S. economic indicators fell by much more than expected in the month of July.

The Conference Board said its leading economic index slid by 0.6% in July after dipping by 0.2% in June. Economists had expected the index to decrease by 0.3%.

Meanwhile, the report said the index fell by 2.1% over the six-month period ending in July 2024, a smaller rate of decline than the 3.1% slump over the six-month period between July 2023 and January 2024.

The dollar index dropped to a low of 101.85 this afternoon. The index was at 101.88 a little while ago, down nearly 0.6% from the previous close.

Against the Euro, the dollar weakened to 1.1083, down more than 0.5% from the previous close. The dollar eased to 1.2990 against Pound Sterling, weakening from 1.2944 a unit of the British currency.

The dollar dropped against the Japanese currency, fetching 146.62 yen a unit, compared to 147.61 yen on Friday. The Aussie firmed to US$ 0.6732 from US% 0.6672.

The dollar weakened against the Swiss franc to CHF 0.8625 from CHF 0.8660. Against the Loonie, the dollar eased to C$ 1.3635 from C$ 1.3680.