The US Dollar lost weight across the board after market participants increased their bets for an additional 50 bps jumbo rate cut by the Fed in November. Markets have quickly absorbed the Fed’s first rate cut in four years and are pivoting towards hopes of further cuts.
Here’s what you need to know on Wednesday, September 25:
The US Dollar Index lost further ground on Tuesday, pressured by rising expectations of further double rate cuts by the Federal Reserve (Fed) in November, as a follow-up to the jumbo 50 bp cut in September. Rate markets are now pricing in a 60% chance of a second 50 bp rate cut on November 7, with the remaining 40% expecting a more reasonable 25 bp cut.
EUR/USD recovered midweek after starting the trading week with a bearish pullback. Still, the pair is boosted by Dollar weakness rather than particularly bullish Euro flows.
GBP/USD found another 30-month high as the British Pound rally continues unabated, but the Bank of England (BoE) Monetary Policy Report Hearings later in the week on Thursday could put a damper on Cable bulls.
USD/JPY retreated on Tuesday, failing in a bullish attempt to reclaim the 146.00 level. Bank of Japan (BoJ) Governor Kazuo Ueda reiterated early Tuesday that the BoJ is in no hurry to raise policy rates, dampening hopes for further hawkish moves by the Japanese central bank.
The AUD/USD also found a fresh 14-month high on Tuesday, recovering despite the Reserve Bank of Australia (RBA) keeping rates unchanged on Tuesday. The RBA’s latest rate-holding decision could prove poorly timed, depending on how Australia’s monthly Consumer Price Index (CPI) is released early Wednesday.
Gold continues to rise as the Dollar falls across the board. XAU/USD is climbing towards $2,700, marking consecutive daily all-time highs. Gold is up nearly 30% year-to-date in 2024.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
