Fed governor Waller has been the latest committee member to call for a cautious approach to US rate cuts, saying that the economy is an a ‘sweet spot’ and that recent hotter-than-expected inflation data has not been welcome. Futures markets now see more than a 10% chance that the FOMC opts for no change in rates when it next meets on 7th November.
While we still think that the Fed is highly likely to cut, clearly there is now a greater risk of a more gradual easing cycle, and the dollar is receiving plenty in the way of upside as a result. We expect investors to start turning their attention to November’s US presidential election. Support for VP Kamala Harris appears to have waned in the past few days, with Trump now seen as a relatively clear favourite.
According to Polymaket, the former president now has around a 59% chance of winning next month, versus just 41% for Harris. This could potentially be helping the dollar on its way upwards, as markets are of the general opinion that a Trump presidency would be a positive outcome for the US dollar.
The information contained in this document was obtained from sources believed to be reliable, but its accuracy or completeness cannot be guaranteed. Any opinions expressed herein are in good faith, but are subject to change without notice. No liability accepted whatsoever for any direct or consequential loss arising from the use of this document.
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EUR/USD stays pressured below 1.0900 amid risk aversion
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GBP/USD remains heavy near 1.3000 after soft UK inflation data
GBP/USD stays under bearish pressure near 1.3000 in the European session. The data from the UK showed that the annual CPI inflation declined to 1.7% in September from 2.2% in August, weighing heavily on the Pound Sterling.
Gold price advances to three-week top amid risk-off mood, bullish USD might cap gains
Gold price scales higher for the second straight day on Wednesday – also marking the fourth day of a positive move in the previous five – and climbs a three-week high, around the $2,677-$2,678 region heading into the European session.
Bitcoin holds onto recent gains, with $70,000 in sight
Bitcoin’s price stabilizes around $67,000 on Wednesday after rallying and breaking above a key resistance barrier on Tuesday. The rise in BTC comes after US Spot ETFs recorded a second straight day of inflows of over $373 million on Tuesday.
British inflation dips to 1.7% in September
And speaking of inflation and Europe, inflation in Britain not only fell below 2% in September but came in significantly lower than expected (1.7%y-o-y vs 1.9% expected).
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