New York CNN —The greenback is strengthening again after a bumpy 2023, as Wall Street accepts that interest rate cuts are coming later than previously expected.
The US Dollar Index, which tracks the dollar against the British pound, euro, Swiss franc, Japanese yen, Canadian dollar and Swedish krona, is up 2.8% for the year as of Friday morning.
“All of a sudden the interest rate differential kicks in — if that is slower than the Fed or faster,” said Krosby.
Higher interest rates tend to garner more international capital to flow into a country, raising demand for the currency and thus its value.
Still, Todd Jones, chief investment officer at Gratus Capital, says he expects the dollar to trend lower eventually as the Fed gets closer to cutting rates.
Persons:
Jerome Powell, Christine Lagarde, Quincy Krosby, ”, Neel Kashkari, Todd Jones, Jones, Anna Cooban, Richard Meade, Janet Yellen, Alicia Wallace, Yellen, ” Yellen
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