US Dollar Dips as Markets Await Federal Reserve Minutes
The US dollar declined Wednesday as investors analyzed softer economic data and awaited Federal Reserve policy minutes to gauge future interest rate hikes.
The Federal Reserve System saw the US dollar remain lower on Wednesday as global markets awaited the release of minutes from its September 15-16 policy meeting. Market expectations for an October rate hike have fallen to 20.5% following softer jobs data and personal consumption expenditures, although a December hike remains highly probable at 84.5%.
Within the Federal Reserve, President of the Kansas City Federal Reserve Jeffrey Schmid argued that the central bank must raise its policy rate further to lower inflation. Meanwhile, markets have reacted sharply to data releases due to a lack of forward guidance from Federal Reserve Chair Kevin Warsh.
In Europe, the euro rallied after French presidential candidate Marine Le Pen increased her proposed spending cut target to €140 billion, which eased pressure on French bond yields. In Asia, the Japanese yen weakened despite Bank of Japan policymaker Ayano Sato stating her support for raising interest rates in several stages. Other market movements included slight dips in sterling and the Australian dollar, while Bitcoin fell to $85,438.59.
