Headline: Institution: Dollar Continues Modest Rally, Ignores Market Expectations of Fed Rate Cut About Three Times

BlockBeats News, February 17th. The US dollar has risen slightly for the second consecutive trading day, completely ignoring market pricing that implied expectations of about three Fed rate cuts this year. The options market indicates that the recent bearish sentiment towards the dollar has eased, with the so-called front-end risk reversal index dropping to its lowest negative level in nearly a month.

The currency market currently expects the Fed to cut rates by about 64 basis points before the end of the year. Some strategists believe that this expectation is excessive, as three rate cuts may go beyond a reasonable range supported by data, posing a risk of a dollar rebound in the market.

Elias Haddad, Global Head of Market Strategy at Brown Brothers Harriman, said: "Expectations of Fed rate cuts seem somewhat excessive, providing room for adjustment for a short-term strengthening of the dollar." He pointed out that the economic growth momentum is strong, and the inflation level has been consistently above the Fed's 2% target. (FXStreet)