Dollar Traders See the Fed’s Next Rate Hike as a Big Sell Signal
- Could plunge 10% in 6-9 months: BNP Paribas Asset Management
- FX markets may be caught off guard if Fed flags tariff risks
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When a nation’s central bank raises interest rates, it’s often a bullish sign for the currency. Not so in the U.S., where expectations for a Federal Reserve rate hike next week are flashing sell signals for the dollar.
BNP Paribas Asset Management says the broad greenback could plunge 10 percent in the next six to nine months, while Invesco Ltd. forecasts it’ll sink about 2 percent against the euro by year-end. Both firms are watching the Fed’s Sept. 26 decision for any comments on the impact of escalating trade tensions. The two companies also see the currency sliding as other central banks inch closer to monetary tightening.