US dollar plunges to multi-year low
Traders are significantly increasing their bets on more aggressive interest rate cuts by the Federal Reserve this year.
This shift in market sentiment follows Federal Reserve Chair Jerome Powell's testimony, which was widely interpreted as dovish, hinting at earlier rate cuts.
Consequently, the US dollar plunged to multi-year lows against the euro and sterling.
Market data now shows a 23% probability of a July rate cut and a 93% likelihood for a September cut, with traders anticipating 66 basis points of cuts by year-end.
Additional pressures on the dollar include criticism of Powell by Donald Trump, upcoming trade negotiations, and a pending tax and spending bill.
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