Data from the United States keeps hopes of a rate cut by the Fed intact.
The dollar fell this Thursday against the yenafter less moderate comments from the Bank of Japan and US data suggesting that upward price pressures continue to wane, keeping the Federal Reserve (Fed) on track to cut interest rates by 25 basis points next week.
The dollar fell 0.8% against the yenat 152.18 yen, and the euro rose 0.04% against the dollar, to $1.0859. On the other hand, the pound sterling fell 0.8% to $1.2857, a day after the British Chancellor of the Exchequer, Rachel Reeveslaunched the biggest tax increases since 1993 in his first budget.
Inflation by the Fed’s target measure, the year-over-year increase in the personal consumption expenditures index, was 2.1% in September, down from an upwardly revised 2.3% in August, according to a report from the Department of Commerce.
The Fed is targeting 2% inflation. “The basis is still that they will cut 25 basis points next week,” said Thierry Wizman, global currency and interest rates strategist at Macquarie in New York.
All eyes were focused on the price index of the personal consumption expenditure (PCE) of USA for September which gave an increase of 0.2% and in the closely watched non-farm payrolls report on Friday.
Economists polled by Reuters estimate that 113,000 jobs were created in October, although the number could be lower due to recent hurricanes. However, the jobs report may be overshadowed in the run-up to Tuesday’s US presidential election.
“To me, a slightly warmer or slightly colder employment number probably won’t change the outlook too much given the upbeat trend in recent economic data,” said Tony Sycamore, market analyst at IG. “It makes sense for me to take some risks and stay out of it” ahead of a week that “will set the tone for the end of the year,” he added.
Some investors have been carrying out operations betting that the Republican candidate donald trump will win, which will help raise the dollar and the returns of the treasury bonds American, although he is still tied with the vice president Kamala Harris in several surveys.
Trump’s plan to implement tax cutslooser financial regulations and higher tariffs is seen as inflationary and could slow down the Federal Reserve on its path to policy flexibility.
In cryptocurrencies, the leading token Bitcoin last traded around $72,185, after reaching a high of $73,609.88 on Tuesday.
Source: Ambito
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