The US dollar continues to rise, and market expectations for the Federal Reserve's interest rate cuts have weakened

On February 17th, the US dollar rose slightly for the second consecutive trading day, unaffected by market expectations of about three interest rate cuts by the Federal Reserve this year. Data from the options market shows that the bearish sentiment towards the US dollar has weakened recently, and the front-end risk reversal indicator has dropped to its lowest negative level in nearly a month. The money market still expects the Federal Reserve to cut interest rates by about 64 basis points before the end of the year, but some strategists believe that the expectation of three interest rate cuts may be excessive. Elias Haddad, Global Head of Market Strategy at Brown Brothers Harriman, stated that the expectation of the Federal Reserve's interest rate cut is excessive and provides adjustment space for the short-term strengthening of the US dollar, as the economic growth trend is good and inflation levels are higher than the Federal Reserve's 2% target.