Home › Forums › Financial Markets/Economics › Nasty day at the stock market today. Dow lost nearly 300 pts…. › how lowering the fed funds
how lowering the fed funds rate again could strengthen the dollar?
If I have to make a guess, it will be like this:
No rate cut -> severe recession -> Less demand for $ -> weaker $
Rate cut -> recession avoided -> demand for $ -> stronger $
I think the market might have figured in a recession into $ demand, and hence its value. By avoiding a recession, $ may get a boost.