Monday, May 29, 2023

Dollar falls in US and economic “catastrophe” looms

The dollar traded near its highest since March on Friday, as optimism about a breakthrough in US debt ceiling talks and strong economic data reduced the prospect of a rate cut in the United States this year.

Democratic negotiators told President Joe Biden on Friday they were making “steady progress” in talks with Republicans aimed at avoiding US default, just days after Biden and top Republican Congressman Kevin McCarthy raised the government’s debt limit. underlined their determination to reach an agreement to extend the $31.4 trillion.

This stoked fears of an unprecedented and economically devastating default, prompting markets to revise their expectations for how high US interest rates might rise.

Data pointed to a still-tight job market, with the number of Americans filing new jobless claims falling more than expected last week, also raising hopes that the Federal Reserve will step in again next month to control inflation. may increase rates.

Currency markets show traders now believe US rates will fall to 4.86% by the end of the year, compared to an expectation of 4.25% two weeks ago, indicating expectations of a wave of rate cuts How has it decreased?

Nation World News Desk
Nation World News Desk
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