BUZZ-COMMENT-FX traders are eyes down for rate cut bingo

Credit: REUTERS/Kacper Pempel

Feb 21 (Reuters) - Bingo cards may come in useful for foreign exchange traders seeking to cross off dates when major central banks, including the Federal Reserve and Bank of England, will start cutting interest rates.

Those dates are up in the air - which opens the door to FX volatility, with 33 of 104 economists polled by Reuters expecting the first Fed rate cut in May. Another 53 forecast June, with the other 18 predicting July or later.

Economists polled by Reuters are also far apart over the possible timing of the BoE's first rate cut. Seven out of 45 said May, 11 said June, 23 August, three September - and one February 2025.

Thirty six economists who answered an additional question highlighted the fluidity of the situation by splitting 50-50 on the likelihood of the first BoE rate reduction coming sooner or later than they expect.

The consensus view is that the later the Fed/BoE starts cutting rates, the better for the dollar/pound - and vice-versa.

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(Robert Howard is a Reuters market analyst. The views expressed are his own)


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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