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Bank of America: Rate Cuts and High Inflation to Weigh on US Dollar
Summary: According to a report from FXStreet, Alex Cohen of Bank of America stated that with the Federal Reserve seemingly ready to resume rate cuts in the face of persistently high inflation, the US dollar may further weaken. He pointed out that worse-than-expected July nonfarm payroll data and concerns about the Fed's independence have fueled market ...
According to a report from FXStreet, Alex Cohen of Bank of America stated that with the Federal Reserve seemingly ready to resume rate cuts in the face of persistently high inflation, the US dollar may further weaken. He pointed out that worse-than-expected July nonfarm payroll data and concerns about the Fed's independence have fueled market expectations for faster and larger rate cuts, despite signs of sticky inflation. Implementing potential rate cuts as inflation rises creates fertile ground for dollar depreciation. Bank of America predicts that the Euro to US Dollar (EUR/USD) pair will rise from the current 1.1620 to 1.20 by the end of the year, and further increase to 1.25 by the end of 2026.
