Yushin Bank: If the Fed Cuts Rates by 25 Basis Points, the Dollar Could Benefit Slightly
ChainCatcher reports that Robert Mialich, a foreign exchange strategist at First Commercial Bank, believes the Federal Reserve is likely to cut interest rates by 25 basis points next week instead of 50. This would be positive for the US dollar, but the impact would be minimal.
Mialich argues that a 25-basis-point cut signifies the Fed's reluctance to significantly ease policy, which could prevent the dollar from falling further but is unlikely to trigger a strong rebound. "Euro-dollar could continue to trade above 1.10," he said.
However, a 50-basis-point cut could push the pair above 1.12, as it would suggest the US economy is in worse shape than data currently indicate. (Jin10)