The U.S. dollar is expected to gradually decline due to weaker economic data, suggesting a potential rate cut could be on the horizon. However, strong GDP growth and a robust labor market may delay rate cuts compared to other countries. Inflation remains high, complicating the Federal Reserve's policy outlook, but recent trends in core PCE inflation data could restore confidence in reaching their 2% inflation target by 2026. The next few months will be key, with a possible shift to a more dovish stance by the end of Q3 if positive trends continue. Risks include unforeseen economic growth and pressure from elevated oil prices, potentially impacting inflation trajectories.
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US Dollar Drifts Lower Amid Rate Cut Speculations
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