Mitsubishi UFJ: Even if the Federal Reserve signals a rate cut, the US dollar is unlikely to continue to fall.

Derek Halpenny, an analyst at MUFG, said that even if the Fed hints that a rate cut decision may be made soon, the dollar is unlikely to continue to fall. Recent price movements show that the correlation between U.S. bond yields and exchange rates is decoupling, while fragile risk appetite supports demand for safe-haven assets such as the dollar. Therefore, any depreciation of the dollar due to rate cut signals will not last long, especially when the money market has fully digested the September rate cut. Factors such as falling commodity prices and increased stock market volatility are not conditions for a sustained sell-off of the dollar.