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The Street
  • 3 days ago
Carley Garner, Senior Strategist and Broker at Decarley Trading, joins TheStreet to discuss what a Fed rate cut could mean for the U.S. dollar.

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Sports
Transcript
00:00If sentiment is overly bearish in the dollar, what could Fed rate cuts mean for the dollar?
00:06Because the latest inflation data might make it more difficult for the Fed to remain on hold.
00:11So what happens when the Fed cuts to the dollar?
00:14It's going to be very interesting to see how the market works this out.
00:18We're in a weird disconnect here where the currency market specifically is not paying attention to interest rate differentials.
00:25And I don't recall another time in my career that it's really been this lopsided.
00:30So to give you an example, like if somebody's holding money in a bank in Europe, they're probably earning somewhere around 2%.
00:40If they're earning, if they're sending money in a bank in the United States, they're probably earning double that or maybe a little bit more.
00:46So in theory, the U.S. dollar should be experiencing strength just because of the interest rate differential.
00:52So even if the Fed starts making changes to policy, I'm not sure that it's going to affect the currencies as much as we think it might simply because the market's already so off sides.

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