How Deep Will The Rate Cut Be?

The greenback continued to take a hit as yesterday’s New Home sales figure spurred speculation that the Federal Reserve will cut its benchmark lending rate by 0.5% this week to prop up the economy. The Fed will announce its rate decision tomorrow at the end of a two-day policy meeting. Interest Rate Futures reflect a roughly 90% chance of a 0.5% rate cut by the Fed this week.
Short-term U.S. interest rates are already among the lowest in the developed world, encouraging investors to borrow in dollars and buy another currency to profit on the difference in yields, which would put pressure on the dollar.
Data showing sales of new U.S. homes declined in December, stoking fears of an imminent economic recession. Purchases of new homes in the U.S. unexpectedly fell yesterday to a 12-year low in December, ending the worst sales year since 1963. Sales decreased 4.7% to an annual […]

Original post by Forextvblog

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