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The U.S. dollar fell against its rivals on June 20, 2019, heading for its biggest two-day drop in a year after the Federal Reserve signaled it could cut rates as early as July. The ECB and RBA had also signaled more stimulus, and higher-yielding currencies such as the Australian dollar and Korean won rallied.
Some hedge funds that had built large long-dollar positions before the Fed decision were forced to sell.
A weaker dollar makes dollar-priced commodities cheaper for foreign buyers, which tends to support export demand and firm prices for feed grains and oilseeds. Expectations of lower U.S. rates also reduce the cost of carrying inventory.
cnbc.comReutersJun 20, 2019After 1,637 past bearish macro events, US Dollar (Broad) moved a median -0.2% over 5 sessions (39% higher; middle half -0.6% to +0.3%), and -0.2% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Dovish Fed signal on rate cuts drove the dollar's biggest two-day drop in a year on June 20, with forced hedge fund long-dollar unwinding amplifying the move.
