Professional Institutional Investors Betting on Softer US Dollar, Citing Potential Easing Cycle by US Federal Reserve

Some professional institutional investors expect the US dollar to weaken further from 20-year highs hit last year, largely because investors expect the Fed's easing cycle to weigh on the greenback relative to other major currencies. According to the latest survey by MLIV Pulse, about 87% of the 331 interviewed institutional investors expect the Fed to cut interest rates to 3% or lower, and some investors have more aggressive expectations than this figure, about 40% of the group believes that the Fed will start an easing cycle this year. These expectations stand in stark contrast to market pricing, which sees an implied policy rate of around 3.05% two years from now.