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The dollar fell sharply against the euro and yen after the Federal Reserve signaled in its new projections that interest rate increases had ended and lower borrowing costs were coming in 2024. The euro rose 0.80% to $1.0882.
A weaker dollar on expected Fed cuts tends to lift dollar-priced commodities and supports export demand for US feed grains and meal, while lower US rates can lift risk appetite and ease financing costs for feed and livestock operations.
reuters.comKaren BrettellDec 13, 2023After 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.
After 388 past bullish macro events, Euro (USD per EUR) moved a median +0.3% over 5 sessions (62% higher; middle half -0.4% to +1.1%), and +0.1% 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.
The Fed's projections showed the tightening cycle was over and cuts were coming in 2024, triggering the sharp dollar sell-off, including the euro's 0.80% gain.
Fed projections on Dec 13 signaling the end of hikes and 2024 cuts weakened the dollar and lifted the euro, starting the move that continued into Dec 14.
