Dollar Weakens Ahead of Fed Minutes
The Bloomberg Dollar Index edged down 0.1% to its lowest level in the US session today, after previously hitting a two-week high in Asia. The pressure came after President Donald Trump re-intensified pressure on the Fed and urged Governor Lisa Cook to resign. Meanwhile, Treasuries strengthened ahead of the release of the Fed minutes, with the 10-year US yield falling 2 basis points to 4.28%.
From Oceania, the New Zealand dollar (NZD/USD) fell 1.3% to 0.5815—its lowest since mid-April—after the RBNZ cut interest rates 25 bps and signaled further easing. Goldman Sachs now expects an additional 25 bps of cuts in October and November. The Australian dollar (AUD/USD) also fell 0.4% to 0.6427 due to AUD/NZD cross-currents.
The euro edged higher: EUR/USD rose 0.2% to 1.1666. EUR/SEK also rose 0.1% to 11.1890 after the Riksbank held interest rates but left open the possibility of a rate cut this year to support the economy. The pound sterling reversed course, weakening 0.2% to 1.3470 even though UK inflation rose to an 18-month high, driven by rising food, transportation, and hospitality prices—complicating the Bank of England's rate cut plans.
USD/JPY fell 0.5% to 146.89, extending a two-day decline and marking its biggest daily decline since early August. In derivatives, one-month risk reversals on BBDXY returned to dollar bullish for the first time since July, although intraday the dollar weakened today. Spot activity in the interbank market also increased, approaching its early August average.
Key points:
Dollar weakens 0.1% ahead of Fed minutes; UST 10Y yields at 4.28%.
Trump urges Lisa Cook to resign, adding political pressure on the Fed.
RBNZ cuts 25 bps; The New Zealand Dollar (NZD) fell to its lowest level since April, while the Australian dollar (AUD) also fell.
The Euro strengthened; the Riksbank held interest rates steady but kept the option of a cut open.
The British pound weakened again despite rising UK inflation; the USD/JPY fell sharply. (ayu)
Source: Newsmaker.id
