Weaker dollar may indicate markets expect US slowdown
Weakening currency despite strong growth presents puzzle for policymakers
The dollar’s depreciation against the euro in recent weeks may indicate the markets anticipate a slowdown of the US economy in 2019 and an interruption of the Federal Reserve’s tighter monetary policy, analysts say.
The last meeting of the Federal Open Market Committee presided over by chair Janet Yellen on January 30–31 is not expected to result in one of the three rate hikes forecast for this year. The ‘FedWatch’ tool of CME Group estimates a 95.9% probability of rates remaining unchanged.
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