The dollar index (DXY00) today is down by -0.18%.  The dollar is weaker amid expectations that the Fed will cut the federal funds target range by -25 bp at the conclusion of today's FOMC meeting.  The dollar extended its losses today after the US Q3 employment cost index rose less than expected, a dovish factor for Fed policy. The dollar has recently been undercut by concerns that President Trump intends to appoint a dovish Fed Chair, which would be bearish for the dollar.  Mr. Trump said last that he wil ...

Economic Indicators - The dollar index (DXY00) decreased by -0.35% due to weaker-than-expected US economic data, including September retail sales and core PPI, which increased the likelihood of a Fed rate cut at the upcoming FOMC meeting [1] - US September retail sales rose by +0.2% month-over-month, below the expected +0.4% [2] - The final demand PPI for September increased by +2.7% year-over-year, slightly above the expected +2.6%, while PPI excluding food and energy rose by +2.6%, below the expected +2.7% [3] - The S&P Case-Shiller composite-20 home price index for September rose by +1.36% year-over-year, below the expected +1.40%, marking the smallest increase in over two years [3] - The Conference Board's US November consumer confidence index fell by -6.8 to a 7-month low of 88.7, weaker than the expected 93.3 [3] Market Reactions - The markets are pricing in an 80% chance of a 25 basis point cut in the fed funds target range at the next FOMC meeting on December 9-10 [4] - The euro (EUR/USD) increased by +0.50% as the weaker dollar supported it, alongside positive economic news from the Eurozone [5] - Eurozone new car registrations for October rose by +5.8% year-over-year to 917,000 units, marking the fourth consecutive monthly increase [6] - Swaps indicate a 2% chance of a 25 basis point rate cut by the ECB at the December 18 policy meeting [6] Currency Movements - The USD/JPY decreased by -0.57% as the yen strengthened against the dollar, driven by concerns over potential Japanese government intervention in the forex market [7] - The decline in T-note yields also contributed to the yen's strength [7]

Core Viewpoint - Global stocks are on track for their third consecutive week of gains and seventh straight month of advances, driven by strong earnings from major companies like Amazon and Apple, which alleviated concerns regarding high valuations [1] Group 1: Market Performance - Global stocks are expected to achieve their third straight week of gains [1] - The market is also set for a seventh consecutive monthly advance [1] Group 2: Company Earnings - Earnings reports from megacap companies Amazon and Apple have eased concerns about lofty valuations [1] Group 3: Currency Movements - The dollar has strengthened following comments from some Federal Reserve officials [1]

Currency Market Dynamics - The U.S. dollar is experiencing a third consecutive daily loss against the euro while slightly increasing against the yen, influenced by U.S.-China tensions and dovish comments from Federal Reserve officials [1] - U.S. Treasury yields are near multi-week lows, with the benchmark 10-year yield just above 4%, contributing to pressure on the dollar amid concerns over a prolonged U.S. government shutdown [2][3] - The dollar index, which measures the greenback against six other currencies, decreased by 0.05% to 98.63, indicating a potential weekly decline of around 0.3% [3] Rare Earths and Trade Relations - Investors are closely monitoring China's recent expansion of rare earth export controls, which has drawn criticism from U.S. officials and raised concerns about potential disruptions to global supply chains [4] - The situation is viewed as possibly a bargaining tactic by China to gain concessions from the U.S., according to market analysts [4] Australian Dollar and Economic Indicators - The Australian dollar remained stable at $0.6511 following data that showed unemployment reached a near four-year high in September, reinforcing the case for interest rate cuts [6] - The Australian dollar has been volatile due to trade tensions, while traditional safe-haven assets have gained [6] - China's yuan strengthened to a two-week high against the U.S. dollar after the central bank set its strongest daily midpoint in a year [6]

Group 1 - The dollar is rising due to stronger U.S. economic data, alleviating concerns about a weak economic outlook, especially in the labor market [1][2] - Initial jobless claims decreased by 33,000 to 231,000, which is below the expected 240,000, indicating a more robust labor market [2] - The Philadelphia Fed's manufacturing activity index increased to 23.2 in September, significantly surpassing the forecast of 2.0, contributing to a positive sentiment regarding the U.S. economic outlook [2]

Market Reactions - Stocks and the dollar increased following the U.S. Federal Reserve's first interest rate cut of the year, with the pan-European STOXX 600 and Wall Street futures rising by 0.5% [1] - Asian markets also saw gains, with Chinese stocks reaching a 10-year high due to local chipmakers reacting positively to Nvidia's ban in China, while South Korea, Taiwan, and Japan's Nikkei all ended more than 1% higher [1] Currency Movements - The dollar rose nearly 0.2% after hitting a 3-1/2-year low earlier in the week, which had negatively impacted non-U.S. exporting firms [2] - The euro remained steady at $1.1825, and the British pound held at $1.36 ahead of the Bank of England's anticipated decision to maintain UK rates at 4% [4] Central Bank Insights - The Fed's "dot plot" indicated two more rate cuts are expected in the remaining meetings of the year, with only one additional reduction projected for 2026 [2] - Fed Chair Jerome Powell suggested that the central bank does not need to act quickly, although analysts believe this could change depending on market conditions [3] UK Monetary Policy - A Reuters poll indicated that economists expect the Bank of England to slow its bond reduction pace to a median of 67.5 billion pounds ($92.2 billion), a larger decrease than previously anticipated [5] - The recent volatility in UK bond markets has raised interest in whether the Bank of England will adjust its current strategy [4]