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Dollar is under pressure due to expectations of a US interest rate cut

UNITED STATES (OBSERVATORY NEWS) — The dollar’s weakness continued on Tuesday amid expectations that the Federal Reserve could cut interest rates this year to ease downward pressure on the economy caused by the outbreak of the Coronavirus in China.

Initially, the dollar rose as the virus spread around the world, as investors consider all assets in the US currency to be safe investments. However, fund managers now believe that the Federal Reserve will likely facilitate monetary policy and reduce interest rates as it benefits from the greatest opportunity to adopt this step.

Against a basket of currencies, the dollar fell 0.2 percent to 99.19, moving away from the three-year high hit last week. However, in the absence of good news about the virus, many do not expect to recover much of its recent gains.

In the latest trading, the euro rose 0.1 percent to $ 1.0863, moving away from the lowest level in three years that it plunged to last week, which pushed it below the level of $ 1.07 as funds poured into the safe haven dollar.

In one of the trading, the yen rose 0.2 percent to 0.2 percent to 110.53 yen against the dollar.

And the Chinese yuan rose in the latest trading 0.2 percent to 7.0225 against the dollar in the foreign market, the highest level in five days.

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