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Markets are now pricing a 72% probability of the FOMC lowering the policy rate by 25 basis points to 1.25%-1.5% range when it meets next on March 17-18, the CME Group FedWatch Tool shows. On Wednesday, the odds of a rate cut in March was only 33.2%.

According to this indicator, there is now a 45% chance of a second 25 bps rate cut in June.

USD reaction

This also explains the unabated selling pressure on the greenback. The US Dollar Index (DXY), which tracks the USD’s performance against a basket of six major currencies, fell to its lowest level in three weeks at 98.36 on Thursday. Since touching its highest level since April 2017 at 99.91 a week ago, the DXY erased nearly 1.5%.