USD strengthens as markets trim rate-cut bets – BBH
|US Dollar (USD) recovered against most major currencies underpinned by an upward adjustment to US interest rate expectations. Fed funds futures trimmed odds of a December 10 rate cut to less than 50% as some Fed officials (Bostic, Logan, Schmid, Kashkari, Musalem, Hammack, and Collins) argued for caution on additional policy easing last week, BBH FX analysts report.
Hawkish Fed rhetoric lifts dollar, cuts odds of December easing
"Nonetheless, their comments aren’t surprising given their hawkish leanings, and some of them don’t vote this year but rotate as voters next year. Fed speakers today include: New York Fed President John Williams, Fed Vice Chair Philip Jefferson, Minneapolis Fed President Neel Kashkari (2026 voter), and Fed Governor Christopher Waller."
"The minutes of the FOMC October 28-29 meeting (Wednesday) should offer more details about the 'growing chorus' of Fed officials supporting skipping a cut. Regardless, the incoming backlog of US economic data will shed greater light on the state of the economy and matter more for near-term rate expectations. This week the highlight is the September non-farm payrolls report (Thursday), while the August data on construction spending (today), factory orders (Tuesday), trade balance (Wednesday), and September real earnings (Friday) take a back seat."
"Non-farm payrolls are expected at 50k vs. 22k in August, consistent with the breakeven pace of job gains (between 30k and 50k) required for keeping the unemployment rate steady. For reference, the ADP private employment fell -32k in August while Revelio labs non-farm employment (private and public) rose 33k. the decline in the hiring rate suggests labor demand is weak and points to downside risk to the NFP print."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.