{"id":86973,"date":"2023-11-29T00:00:00","date_gmt":"2023-11-29T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/uae\/greenback-slips-to-three-month-lows-as-market-bets-in-fed-rate-cuts\/"},"modified":"2023-11-29T00:00:00","modified_gmt":"2023-11-29T00:00:00","slug":"greenback-slips-to-three-month-lows-as-market-bets-in-fed-rate-cuts","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/uae\/2023\/11\/29\/greenback-slips-to-three-month-lows-as-market-bets-in-fed-rate-cuts\/","title":{"rendered":"Greenback slips to three-month lows as market bets in Fed rate cuts"},"content":{"rendered":"

Investors are ditching the greenback: <\/strong>The USD fell to three-month lows yesterday, putting it on track for its worst monthly performance in a year, after Federal Reserve Governor Christopher Waller hinted at the possibility of rate cuts in the coming months, the Financial Times<\/a> wrote. The USD index \u2014 which tracks the greenback against a basket of currencies \u2014 dipped to its lowest since mid-August yesterday, and has lost 3.6% this month in a sign that financial conditions are easing.<\/p>\n

What he said: <\/strong>\u201cI am increasingly confident that policy is currently well positioned to slow the economy and get inflation back to 2%, Waller \u2014 a hawkish member of the Fed board \u2014 said<\/a> yesterday. If inflation continues to decline for \u201cseveral more months \u2026 we could start lowering the policy rate.\u201d<\/p>\n

US treasuries gained ground: <\/strong>Yields on US government debt fell to two-month lows following Waller\u2019s comments. The rate on the 10-year bond slipped further to 4.35%, and has now fallen from above 5%<\/a> in just five weeks.<\/p>\n

A cause for celebration in our neck of the woods: <\/strong>A weakening greenback is good news for countries with USD-denominated debts or for those heavily dependent on imports, like Egypt. A weaker USD makes it cheaper to service USD debt and to pay for imports.<\/p>\n

Rain on our parade: <\/strong>Another Fed governor, Michelle Bowman, still believes that further hikes may be in the cards to bring inflation down \u201cin a timely way.\u201d She warned against \u201cprematurely declaring victory in the fight against inflation.\u201d<\/p>\n

Could targeting MDBs avail investments for climate action? <\/strong>BlackRock researchers think targeting multilateral development banks (MDBs) could make available as much as USD 4 tn for climate-related investments in emerging markets, according to a paper<\/a> published yesterday. The multinational investment company suggested MDB reforms to address the climate financing gap, focusing on financing infrastructure investments in emerging markets, and backing initial losses in climate-related projects.<\/p>\n

Diversification needed:<\/strong> BlackRock highlighted that climate investment often leans too much towards the US, Europe, and China, leaving major financing gaps in emerging markets. The investment firm said MDBs are pivotal in mobilizing private capital, recommending MDB participation in AAA-rated bond issuance and \u201cputtable green bonds\u201d to mitigate investment risks. <\/p>\n

Stop us if this sounds familiar: <\/strong>The BlackRock paper highlights the familiar problem of emerging markets\u2019 struggle to access capital to address climate change, reports Bloomberg<\/a>.<\/p>\n

ALSO WORTH NOTING- <\/strong><\/p>\n