Dollar Recovers on Hawkish Fed Comments

Group 1: Dollar Index and Federal Reserve Comments - The dollar index (DXY00) recovered from early losses, finishing up by +0.11% due to hawkish comments from Federal Reserve officials [1] - Dallas Fed President Lorie Logan indicated she may not support a rate cut at the upcoming FOMC meeting, citing inflation above the 2% target [4] - Chicago Fed President Austan Goolsbee emphasized the need for caution regarding rate cuts, noting the US economy is still growing solidly [4] Group 2: Labor Market and Job Cuts - The dollar initially declined as the US government shutdown continued and signs of labor market weakness emerged, with significant job cuts reported [2] - In September, job cuts fell by 25.8% year-over-year to 54,064, but total job cuts announced this year reached 946,426, the highest for the same period since 2020 [3] - The year-to-date job additions from January to September were nearly 205,000, marking the weakest stretch since 2009 [3] Group 3: Market Expectations and Euro Impact - Markets are pricing in a 98% chance of a -25 basis point rate cut at the next FOMC meeting on October 28-29 [5] - The euro (EUR/USD) fell by -0.06% as the dollar's rebound weighed on it, compounded by an unexpected increase in the Eurozone's unemployment rate [6] - Hawkish comments from ECB officials initially supported the euro, but overall economic news turned bearish for the currency [6]