 Dollar is broadly stronger today, though the momentum behind the move is not particularly robust. Markets are awaiting insights from several Fed officials and the release of September FOMC minutes later in the US session. While Fed's direction on monetary easing is well understood, the pace of future rate cuts remains uncertain and is unlikely to be definitively answered by today's minutes. At present, Fed funds futures suggest an 86.6% likelihood of a 25bps rate cut at the November meeting, with a slim 13.4% chance of no change. However, these probabilities could be significantly altered by tomorrow’s US CPI report. While today’s FOMC minutes are important, the inflation data is expected to carry much more weight in shaping near-term expectations about Fed’s next steps. So far this week, Dollar is currently the strongest currency, followed by Swiss Franc and Yen. On the other end, Kiwi has been the weakest, trailed by Aussie and Canadian Dollar. It should be noted that, Dollar, Euro, Sterling, Swiss Franc, and Yen are holding within last week's ranges against each other. Commodity currencies, on the other hand, have broken to the downside. It's more about risk aversion for now.... |
