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Dollar under pressure on rising Fed rate-cut wagers

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Risk-on rally lifts bitcoin to record high

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Analysts caution economic data could alter rate

expectations

By Jaspreet Kalra

SINGAPORE, Aug 14 (Reuters) - The U.S. dollar was under

pressure on Thursday as traders piled into wagers that the

Federal Reserve will resume cutting interest rates next month,

powering Bitcoin to a record high, while a blistering rally in

regional stocks took a breather.

MSCI's gauge of equities in Asia excluding Japan

nudged higher and lingered near its loftiest

level since September 2021, taking cues from Wall Street, where

the S&P 500 and Nasdaq indexes hit new closing

highs for the second straight day.

The MSCI All Country World Index rose to a

record high for the second straight session on Wednesday.

Japan's Nikkei fell after a searing six-day rally

that boosted it past the 43,000 mark for the first time. Shares

in Korea and Taiwan were slightly lower as well. China's

blue-chip stock index and shares in Hong Kong

gained.

The dollar fell to a two-week low against a basket of major

peers on shifting expectations of U.S. rate cuts, with

comments from the U.S. Treasury Secretary also helping bolster

expectations of an outsized 50 basis point cut.

The Japanese yen hit a three-week high of 146.38

per dollar in early trading.

Treasury Secretary Scott Bessent said on Wednesday that an

aggressive half-point cut was possible in September after

revised labour market data from last week showed that job growth

had slowed sharply in May, June and July.

Goldman Sachs said on Wednesday in a research note it

expects the U.S. Federal Reserve to deliver three 25-basis-point

interest rate cuts this year and two more in 2026.

Traders are pricing in certainty of a rate cut in September

with odds of a 50 bps cut rising to 7%, up from 0% a week

earlier.

While a tame U.S. inflation report this week boosted the

case for rate cuts, some analysts have cautioned against market

complacency, saying that upcoming data may alter expectations.

"We're not as convinced of a 25bp FOMC rate cut in September

as financial markets, let alone a 50bp rate cut," said Carol

Kong, economist and currency strategist at Commonwealth Bank of

Australia.

"There will be another CPI and payrolls report ahead of the

September meeting that can make or break the case for a rate

cut," Kong said.

BITCOIN, GOLD

Optimism on monetary policy easing in the world's largest

economy also powered cryptocurrency bitcoin to an

all-time high of $124,002.49 with analysts also pointing to

recent financial sector reforms as a tailwind for the asset

class.

Bitcoin has risen 32% so far in 2025, and the second largest

cryptocurrency, Ethereum, has climbed 41% and is hovering

just shy of its all-time high hit in November 2021.

In commodity markets, gold prices rose 0.5% to $3,371

and crude oil prices edged up after hitting a two-month low on

Wednesday as investors kept their focus on the summit between

U.S. President Donald Trump and Russian leader Vladimir Putin on

Friday.

Trump on Wednesday threatened "severe consequences" if Putin

did not agree to peace in Ukraine but also said that a meeting

between them could swiftly be followed by a second one that

would include Ukrainian President Volodymyr Zelenskiy.

In the past, Trump has said both sides will have to swap

land to end fighting that has cost tens of thousands of lives

and displaced millions.

"While lack of progress towards a ceasefire may lead to

renewed threats of secondary oil tariffs/sanctions, we see

limited risk of large disruptions in Russia supply," analysts at

Goldman Sachs wrote in a note.

Large volumes of Russian exports, the possibility of

deepening price discounts to maintain demand, and the likely

eagerness of key buyers India, and especially China, to continue

energy cooperation with Russia are expected to avert major

disruptions, they said.

Trump signed an executive order last week levying an

additional 25% tariff on India's exports to the U.S., saying

that the country directly or indirectly imported Russian oil. He

has also hinted at similar tariffs on China.