With inflation stuck below the Federal Reserve’s two percent target, dimming chances of any economic reforms has traders questioning whether it would lift interest rates for a third time this year. Just months ago there had been bets on four hikes.
“The market has been waiting for the Trump failure cascade to begin and yesterday’s health care headlines once again bring into question the administration’s ability to enact on their key legislative promises leaving investors in limbo and the dollar sagging,” Stephen Innes, a senior trader at OANDA, said in a commentary.
The greenback was marginally up against its major peers but remained stuck at multi-month lows, with the euro enjoying support from expectations the European Central Bank will begin to wind in its stimulus in the near future.
The bank is to hold its next policy meeting Thursday and boss Mario Draghi’s statement will be pored over for clues about its timetable as the eurozone economy continues to improve.
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