Dollar Continues to Gain
The dollar index strengthened for a second consecutive session to 99.5 on Thursday, after comments from Fed Chair Powell lowered expectations for further interest rate cuts.
The Fed delivered a 25bps reduction as expected on Wednesday, but Powell emphasized that a December rate cut is not a foregone conclusion.
Market-implied odds of another cut in December fell sharply to around 68% from about 90% prior to the meeting.
Investors had largely anticipated an additional 25bps cut in December, in line with the Fed’s September projections.
Meanwhile, the meeting between Presidents Trump and Xi concluded with the US lowering overall tariffs on Chinese imports by 10% to 47%, while Beijing pledged to curb fentanyl exports and increase purchases of US soybeans.
These outcomes were broadly anticipated by markets.
The greenback gained the most against the yen after the BoJ left interest rates unchanged and speculation grew that the central bank may refrain from additional moves this year.
Source: Tradingeconomics.com
