"The US dollar remained near multi-week lows on Tuesday, as investors adopted a cautious stance ahead of the release of the FOMC minutes later today. Markets are looking to the minutes for clearer signals on the Federal Reserve's policy trajectory in 2026, at a time when year-end liquidity is thin, and price action may be amplified. The tone of the minutes could prove decisive. Any dovish lean would likely reinforce expectations for further easing next year, weighing on both the dollar and treasury yields."
"Conversely, more balanced or cautious messaging could provide some near-term support. For now, markets are broadly pricing in two rate cuts in 2026. Beyond the immediate focus on the minutes, uncertainty surrounding the future leadership of the Federal Reserve continues to act as a structural headwind for the dollar. Speculation that a more dovish candidate could be appointed has revived concerns about central bank independence, increasing the risk of volatility across both forex and bond markets."
The US dollar hovered near multi-week lows as investors took a cautious stance ahead of the FOMC minutes release. Markets are seeking clearer signals on the Federal Reserve's policy trajectory in 2026 amid thin year-end liquidity that could amplify price action. A dovish tone in the minutes would likely reinforce expectations for further easing next year, putting downward pressure on both the dollar and Treasury yields, while more balanced messaging could offer near-term support. Markets are broadly pricing in two rate cuts in 2026. Uncertainty over future Fed leadership and speculation about a more dovish appointee act as a structural headwind and raise volatility risks across forex and bond markets.
Read at London Business News | Londonlovesbusiness.com
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