USD fell against most of its major rivals in the European session on Monday as investors waited for the minutes from the Federal Recerve’s July meeting and the speech of the Fed chairman Jerome Powell later this week to receive more clues on the trajectory of the central bank's interest rates.
The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, decreased 0.24% from the previous close to 102.22.
The minutes from the Fed’s latest meeting will be released on Wednesday and the Fed chair Powell will address the Jackson Hole symposium on Friday. Markets hope these two events will provide them more clarity on the path of interest rates in the U.S. heading into the final third of 2024. Powell is widely expected to reiterate in his speech that rate decreases are coming soon.
According to the CME FedWatch, markets now see a 71.5% probability that the U.S. central bank will reduce its rates by 25 basis points to 5.0%-5.25% at its meeting next month and a 28.5% probability of a deeper cut - by 50 basis points. The September move is expected to be followed by at least two more quarter-point rate cuts - likely, in November and December.