"The dollar edged lower on Wednesday, erasing Tuesday's gains, and remained confined to a consolidation range as investors awaited the Federal Reserve's policy decision and updated economic projections. Markets widely expect a rate cut today, alongside projections pointing to two additional reductions in 2026. However, expectations could change drastically in reaction to Chair Jerome Powell's tone at the press conference and the updated dot plot."
"Bond investors were also cautious ahead of the Fed decision, driving prices lower; 10-year Treasury yields rose to near 4.2%, and could remain exposed to the impact of the Fed decision. At the same time, Tuesday's data offered mixed signals on the labour market. Job openings rose in October to 7.67 million, marking a second straight upside surprise versus expectations. Meanwhile, layoffs were on the rise, supporting interest rate cut expectations."
The dollar edged lower and remained inside a tight consolidation range as investors awaited the Federal Reserve's policy decision and updated economic projections. Markets widely price a rate cut at the meeting and project two additional reductions in 2026, though expectations could shift depending on Chair Jerome Powell's press conference tone and the updated dot plot. Bond investors were cautious before the decision, pushing prices down and lifting 10-year Treasury yields toward 4.2%, leaving yields vulnerable to the Fed outcome. Recent labour data were mixed: job openings rose to 7.67 million while layoffs increased, bolstering cut expectations. A dovish policy path could weaken the dollar while supporting other major currencies, particularly the euro.
Read at London Business News | Londonlovesbusiness.com
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