The dollar traded near its lowest levels of the year on Tuesday, on the eve of the expected the start to a U.S. easing cycle that markets are betting may begin with an outsized rate cut.
The euro rallied overnight to $1.1138 and traded around there early in the Asia session, not far from the year's high against the dollar of $1.1201.
Fed funds futures rallied on Monday to push the chance of a 50 basis point rate cut to 67%, against 30% a week ago.
"That's because the contrast between central bank outlooks will remain starkest between the Fed and the BoJ, for the time being."
The U.S. dollar index weakened 0.4% overnight to 100.7, not far from its 2024 low made last month at 100.51.
Persons:
Sterling —
Organizations:
Macquarie, Fed, Bank of, The Bank of England, New, U.S
Locations:
U.S, Asia, Tokyo, Bank of Japan, New Zealand