Dollar bears look set to chalk up a second monthly victory of bets against the greenback, but some see green shoots are sprouting for the battered currency on bets that the Federal Reserve is unlikely to cave in to pressure to cut rates later this year.<\/p>\n
The\u00a0U.S. dollar index<\/a><\/span>, which measures the greenback against a trade-weighted basket of six major currencies, fell 0.47%.<\/p>\n \u201cWe see a moderately stronger USD from here \u2013 we expect the broad dollar index to rise by up to 5% in H2 (second half of the year),\u201d Oxford Economics said in a recent note.<\/p>\n The expectations for a dollar comeback later this year, Oxford Economics adds, is driven by expectations that the \u201cFed won’t pivot in H2.\u201d<\/p>\n Expectations for a pivot Fed have helped bring the hammer down on the dollar, pushing it to one-year lows earlier this month.<\/p>\n But recent economic data pointing to still sticky\u00a0inflation<\/a><\/span>\u00a0and a banking crisis that hasn\u2019t been as bad as many feared so far, has forced many to reassess their dovish forecast on Fed rate cuts, pushing Treasury\u00a0yields<\/a><\/span>\u00a0higher from recent lows.<\/p>\n Markets expectations for a rate hike on May 3 are now almost fully priced in, according to Investing.com\u2019s\u00a0Fed Rate Monitor Tool<\/a><\/span>, while just one rate cut is currently expected in 2023. That is a far cry from the 100 basis points of rate cuts that were priced in just a month ago when the banking crisis emerged.<\/p>\n