The expectation of an interest rate cut by the Federal Reserve is heating up, how will the global foreign exchange market fluctuate?

The US dollar index has been weak recently, with the expectation of a rate cut by the Federal Reserve. Will the US dollar index continue to weaken? On Thursday, the European Central Bank cut its three key interest rates by 25 basis points, in line with market expectations. The trade negotiations between Europe and America are also ongoing. In the background of the weakening US dollar, is the euro expected to strengthen? Li Ni, a risk strategy analyst at Ping An Bank, analyzed that the Federal Reserve reiterated the need to be cautious when formulating monetary policy and it is difficult to cut interest rates in the short term. The US dollar index may ease in the short term but face devaluation pressure in the medium term. The year-long loose policy period of the European Central Bank will pause, leading to an increase in the euro. It is expected that the Bank of Japan will maintain its interest rates unchanged, and the convergence of US-Japan interest rate differentials will benefit the Japanese yen.