He global dollar strengthened on Wednesday and hit an 11-week high as investors ruled out a sharp cut in interest rates. interest rates of the United States Federal Reserve (Fed) in the next monetary policy meeting and discounted in prices a possible electoral victory of the former president Donald Trump.
In parallel, the dollar index — which measures the greenback’s performance relative to a basket of six other internationally relevant currencies — rose 0.3% to 103.59, after hitting an 11-week high of 103.60.
The perspectives of the monetary policy of the Federal Reserve are the core of the strength of the dollar right now: traders have estimated that there is a 97% chance that the Fed cut 25 basis points when it decides its monetary policy on November 7, and a 3% chance of a pause, according to LSEG estimates. A month ago, traders were seeing a 50-50 chance of a massive 50 basis point drawdown.
Meanwhile, market prices still strongly favor a total of 50 basis points of easing this year, but comments from central bankers overnight shifted toward a hawkish line. Raphael Bostic, of the Atlanta Federal Reservesaid it had forecast only a 25 basis point rate cut for this year, while Mary Daly, of the San Francisco Federal Reservesaid “one or two” cuts in 2024 would be “reasonable.”
Furthermore, with the US presidential election just weeks away, investors’ attention has shifted to the long-awaited race. Trump’s plan to implement tax cuts, Looser financial regulations and higher tariffs are seen as positive for the dollar. Some duty Higher rates, for example, would have negative consequences for the growth of Asian and European exporters, which could force their central banks to reduce their interest rates, weakening their currencies and, at the same time, boosting the dollar.
The dollar against other currencies
He euro, fell 0.4% to $1.0855, after previously falling to $1.0853, its lowest level since early August. Investors will closely follow the meeting of the ECB on Thursday, although if the monetary authorities apply the 25 basis point cut currently discounted and the president Christine Lagarde refrains from giving too many clues about its rate outlook, the impact on the market could be moderate.
Meanwhile, the pound sterling was one of the biggest movers among the major currencies, falling 0.7% to $1.2982. It fell below the $1.30 level for the first time since August 20, after data showed that the rate of inflation Annual consumer prices fell to 1.7% in September from 2.2% in August. This is the lowest reading since April 2021 and is below the 1.9% predicted by a Reuters poll of economists.
Meanwhile, in front of the yen, The dollar rose 0.4% to 149.765 yen, not far from Monday’s high of 149.98 yen, the strongest since Aug. 1.
Source: Ambito
I am Pierce Boyd, a driven and ambitious professional working in the news industry. I have been writing for 24 Hours Worlds for over five years, specializing in sports section coverage. During my tenure at the publication, I have built an impressive portfolio of articles that has earned me a reputation as an experienced journalist and content creator.
