The Dollar Is Taking the Brakes!
The Bloomberg Dollar Index is flat after previously rising slightly by around 0.1%. This slight gain came after US Department of Labor data showed that job openings in October rose to a five-month high. Market participants are now adopting a wait-and-see approach ahead of the Fed's decision, while assessing the direction of interest rate policy next year.
This Wednesday, the market expects the Fed to cut interest rates for the third consecutive time. However, the main focus is not just on whether to cut or not, but rather on the latest dot plot, economic projections, and Jerome Powell's comments. Analyst Richard Franulovich of Westpac believes there is a chance the Fed's statement will be slightly modified to signal a possible pause in cuts. He also cautioned that the 2026 projections are still "fragile": just one more dovish official will add one more cut, and the median immediately shifts from one to two cuts.
In the bond market, US Treasury yields fell slightly by around 1 basis point across all tenors, with the 10-year yield hovering near 4.18%. In the forex market, USD/JPY fell around 0.2% to 156.64, as leveraged accounts sold dollars after earlier demand for dollars related to the fixing, according to an FX trader in Asia. EUR/USD remained relatively stable around 1.1625, while NZD/USD fell 0.3% to 0.5766 following comments by an RBNZ official that interest rate policy was not yet "set," even though the market had begun pricing in a hike in 2026. AUD/USD also weakened slightly, around 0.2% to 0.6631.
In Europe, the euro reacted little despite political news from France, where parliament approved a social welfare bill—a victory for the government. Overall, global markets remained cautious: the dollar tended to be stable, yields fell slightly, and movements in major currencies were relatively limited. Everyone was waiting for the same thing: whether the Fed would simply cut interest rates tonight, or would also give a "hard signal" about pausing or continuing the rate-cutting cycle next year. (asd)
Source: Newsmaker.id
