# Dollar drops as Fed signals coming rate cuts

> 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.

- Date: 2023-12-13 · published 2023-12-13T12:00:00.000Z
- Category: macro · region US · magnitude high
- Page: https://feedsoft.ai/events/8296-dollar-drops-as-fed-signals-coming-rate-cuts
- Commodities: [US Dollar (Broad)](https://feedsoft.ai/c/DXY.md), [Euro (USD per EUR)](https://feedsoft.ai/c/EURUSD.md)

## Why it matters

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.

## Read by commodity

- DXY: bearish ▼
- EURUSD: bullish ▲

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| DXY | 2023-12-14 | 1 | -1.3% | -3.8 | 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. |
| EURUSD | 2023-12-14 | 1 | +1.9% | 3.9 | 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. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| DXY | 2019-10-30 | [Dollar dips as Fed signals pause in rate-cutting cycle](https://feedsoft.ai/events/56773-dollar-dips-as-fed-signals-pause-in-rate-cutting-cycle.md) | +0.1% | +1.0% |
| DXY | 2019-06-20 | [Fed rate-cut sign boosts stocks, dollar drops](https://feedsoft.ai/events/7435-fed-rate-cut-sign-boosts-stocks-dollar-drops.md) | -1.1% | -0.8% |
| DXY | 2024-07-31 | [Dollar falls as Fed signals likely September rate cut](https://feedsoft.ai/events/29455-dollar-falls-as-fed-signals-likely-september-rate-cut.md) | -0.5% | -1.9% |
| DXY | 2024-07-31 | [Stocks rise; yields, dollar lower as Fed signals rate cut](https://feedsoft.ai/events/29141-stocks-rise-yields-dollar-lower-as-fed-signals-rate-cut.md) | -0.5% | -1.9% |
| DXY | 2024-09-05 | [Investor bets shift as dollar weakens with looming Fed rate cuts](https://feedsoft.ai/events/28220-investor-bets-shift-as-dollar-weakens-with-looming-fed-rate-cuts.md) | +0.2% | -0.8% |
| EURUSD | 2019-06-20 | [Fed rate-cut sign boosts stocks, dollar drops](https://feedsoft.ai/events/7435-fed-rate-cut-sign-boosts-stocks-dollar-drops.md) | +1.6% | +0.1% |
| EURUSD | 2024-09-05 | [Investor bets shift as dollar weakens with looming Fed rate cuts](https://feedsoft.ai/events/28220-investor-bets-shift-as-dollar-weakens-with-looming-fed-rate-cuts.md) | -0.6% | -0.3% |
| EURUSD | 2023-11-27 | [US dollar weakens as Fed rate cut view weighs](https://feedsoft.ai/events/33364-us-dollar-weakens-as-fed-rate-cut-view-weighs.md) | -0.5% | +0.7% |

## Sources

- reuters.com: https://www.reuters.com/markets/currencies/dollar-back-foot-traders-look-fed-cut-timing-clues-2023-12-13/

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.