#federal-reserve-rate-cut

#federal-reserve-rate-cut

European equities opened higher on Wednesday, extending the rebound triggered by renewed hopes of US monetary easing and signs of diplomatic progress in the Ukraine conflict. Softer US data yesterday has strengthened expectations for a Federal Reserve rate cut in December, helping to ease pressure on global risk assets. Meanwhile, Ukrainian President Volodymyr Zelenskiy's endorsement of a US-backed peace framework added a layer of geopolitical relief.

The dollar traded within a narrow range on Tuesday as investors adopted a cautious stance ahead of a high-stakes week featuring key central bank decisions and pivotal trade developments. US Treasury yields eased slightly, with the 10-year remaining below 4%. On the monetary front, the Federal Reserve is widely expected to deliver a 25-basis-point rate cut on Wednesday. At the same time, both the European Central Bank and the Bank of Japan are projected to keep rates unchanged, which could weigh on the dollar.

The South African stock market opened to the downside as investors reacted to the Federal Reserve's interest rate decision. While the 25-basis-point cut came out as expected and the Fed's projections pointed to more cuts this year, the cautious tone of the Fed Chair had an impact on sentiment and could weigh on risk appetite. A decline in gold prices also weighed on the stock market and could continue to put pressure on the mining sector if corrections persist.

The index holding steady at the 97.00 level highlights the psychological importance of this support as the first line of defense against renewed selling pressure. However, the continued movement within a descending channel and the weakening short-term momentum raise questions about the dollar's ability to maintain this stability for long. The nine-day exponential moving average (EMA) at 97.32 remains a key barrier to any upward attempt, making it a critical near-term test.