MUFG: The US dollar may fall next year, and weak economic data may boost expectations of interest rate cuts

Mitsubishi UFJ Financial Group said in a report that the dollar looks set to fall next year as recent weaker U.S. economic data could bolster market expectations of rate cuts from the Federal Reserve. Noting Wednesday's weaker-than-expected ISM services report and ADP private payrolls data that showed slower job growth, Lee Hardman, an analyst at the bank, said: "Overall, these developments give us more confidence that U.S. inflation and growth will continue to slow, which will encourage U.S. interest rate markets to price in more rate cuts from the Federal Reserve over the coming year." He said this is a key assumption in the bank's expectation of a weaker dollar. (Jinshi)