The US Dollar was under pressure during the Asian trading session on Friday and is expected to record a loss for the week against most of its major rivals. The Federal Reserve has joined ranks with most of the other central banks in developed economies and is planning to take a looser approach to interest rates going forward. Analysts say that the concerns over worsening global growth rates are generally forcing central banks to reevaluate their policy. Some analysts believe that the latest data is pointing to a prolonged period of sell pressure for the greenback. One thing that could provide a bright spot is any progress in the trade talks at the upcoming G20 meeting in Japan next week, though analysts say that the likelihood of a breakthrough is low.
As reported at 10:26 am (JST) in Tokyo, the USD/JPY was trading at 107.3230 Yen, up 0.0214% and off the earlier low of 107.236 Yen. The GBP/USD was trading at $1.2709, up 0.0181%; the pair has ranged from a low of $1.2703 to a high of $1.2712. The EUR/USD was trading at $1.1295, a gain of 0.0319% and off the earlier high of $1.12987.
BoE Plans to Stay Course on Tightening
Given the Fed's latest statement, markets have already begun pricing in three rates cuts for 2019, with the first likely to be announced shortly after next month's meeting. Going out to 2020, analysts believe that a total of five rate cuts could be in the works by the middle of next year. The Bank of England, meanwhile, kept to its rhetoric that it was prepared for more rate hikes; they are still likely to take a caution tone at least until the October 31st Brexit deadline.