Bank of America: Interest rate cuts and high inflation will weigh down on the US dollar.

Alex Cohen of Bank of America stated in a report that with the Federal Reserve appearing ready to restart rate cuts despite high inflation, the US dollar may weaken further. He pointed out that worse-than-expected July non-farm payroll data and concerns about the independence of the Federal Reserve have fueled market expectations for faster and larger rate cuts, even though inflation still shows signs of stickiness. "Implementing potential rate cuts during rising inflation creates fertile ground for the depreciation of the US dollar." Bank of America predicts that the Euro to US Dollar (EUR/USD) pair will rise from the current 1.1620 to 1.20 by the end of the year, and further increase to 1.25 by the end of 2026.