MUFG: The dollar may fall further due to expectations of rate cuts

MUFG said the dollar could fall further after its recent decline as the Federal Reserve is likely to start cutting interest rates in September and could signal further cuts than previously expected. The next set of forecasts in September will show rising unemployment and falling inflation, which will form the basis for starting a rate cut cycle, analysts said. The median rate forecast for 2024 could rise from one rate cut to possibly three or four. However, broader geopolitical risks and weak economic growth in Germany should limit dollar depreciation. MUFG expects the euro/dollar EUR/USD to rise from the current 1.1035 to 1.12 by the end of the year. (Jinshi)