USD Weakens, Rate Cut Looms
The US dollar fell as market confidence in a Fed rate cut this year grew, while signs of a French political deal boosted the euro.
At 4:45 AM ET (8:45 AM GMT), the Dollar Index was 98.342 (-0.2%), pointing to a weekly decline of -0.3%.
Why did the USD fall?
Easing expectations are growing: Markets are pricing in a 25-bps cut at the October 28–29 FOMC meeting, followed by another cut in December, and then three more next year (LSEG data).
Fed Signals: Powell assesses downside risks to employment; the Beige Book notes activity momentum has faded slightly in the past eight weeks.
Recent context: Last month, the Fed cut rates for the first time since December to 4.00%–4.25%.
Against other major currencies:
EUR/USD rose 0.1% to 1.1659 — a one-week high; Sentiment was boosted by the prospect of Prime Minister Sebastien Lecornu passing two no-confidence motions after delaying pension reforms.
GBP/USD rose 0.3% to 1.3436 — supported by UK GDP +0.1% m/m (August) after being stagnant in July.
USD/JPY fell slightly to 151.06 — Japanese political doubts added to the yen's strength.
USD/CNY weakened to 7.1253 — stabilization continued after a series of strong PBoC fixings.
AUD/USD fell 0.1% to 0.6503 — Australian jobs data was weak, unemployment jumped to a four-year high; speculation of an early RBA cut in November increased.
Agenda & Risks Ahead
FOMC Oct 28–29: Will the Fed confirm its cutting path?
Trump–Xi @ APEC (end Oct): The Nov 10 deadline for a 90-day tariff truce is the market focus.
Source: Newsmaker.id
