2025-12-09T16:41:32+00:00
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Shafaq News
The U.S.
dollar rose on Tuesday ahead of an expected rate cut from the Federal Reserve
on Wednesday, while the Australian dollar was firmer after its central bank
ruled out more easing.
Markets are
anticipating a rate cut from the Fed, and preparing for several more central
bank decisions before the weekend.
The
greenback extended gains after data showed U.S. job openings increased modestly
in October, while hiring remained subdued. Job openings, a measure of labor
demand, were up 12,000 to 7.670 million by the last day of October, according
to the Job Openings and Labor Turnover Survey, or JOLTS report, on Tuesday.
Economists polled by Reuters had forecast 7.150 million unfilled jobs.
The dollar
gained after the report, extending gains versus the yen to 156.735 yen and the
euro, which slipped 0.1% to $1.1619 .
With the
data out of the way, the market has turned its focus once again to the Fed.
Investors
are dialing back expectations of rate cuts in 2026 as scepticism mounts that
Kevin Hassett, the frontrunner to succeed Jerome Powell, whose eight-year term
as Fed chair ends in May, will prove not as dovish as hoped by U.S. President
Donald Trump.
“After
being wrong-footed by communications in the last five decisions, investors are
all-in on bets for a ‘hawkish cut’ —a drop in the policy rate accompanied by
cautious guidance in the statement, dot plot, and press conference,” said
Karl Schamotta, chief market strategist, Corpay in Toronto.
“This
is seen keeping front-end U.S. yields well supported and preventing an erosion
in the dollar into year-end,” he added.
The U.S.
dollar index , which measures the greenback’s strength against a basket of six
currencies, rose 0.2% to 99.22.
US OUTLOOK
IN 2026
With markets
seeing that policy easing from the U.S. central bank this week is a
near-certainty, attention is also turning to the outlook for the year ahead.
“When
the statement is published, everyone will be looking at the dot plot,”
said Commerzbank FX analyst Michael Pfister.
“We are
seeing decision-makers with diverging views now,” he said, adding that if
the dot plots are lower than the last time, this will probably not be helpful
for the dollar.
The
“dots” from the September meeting, when the Fed resumed its easing
cycle with a 25 basis-point cut, showed a policy rate of 3.6% by the end of
2025, 3.4% at the end of 2026, and 3.1% by the conclusion of 2027.
Elsewhere,
the euro slipped following Monday’s selloff in bund markets, after ECB board
member Isabel Schnabel told Bloomberg News that the bank’s next move may be an
interest rate hike rather than a cut as some expect, but added that it would
not happen in the near future.
AUSSIE
DOLLAR GETS LIFT; QUAKE SHAKES YEN
The
Australian dollar strengthened after the Reserve Bank of Australia kept rates
on hold.
The currency
advanced 0.4% to US$0.6647 after the central bank held rates for a third
consecutive month at 3.6% as widely expected, and warned that a pickup in
inflation could be persistent.
The Aussie
extended gains as RBA Governor Michele Bullock said in a press conference that
more rate cuts were not needed.
The yen
earlier in Asia firmed after a powerful 7.5-magnitude earthquake struck Japan’s
northeast overnight.
That added
to the risk-averse mood ahead of the Fed meeting and expected policy decisions
from several other central banks, while an auction of five-year government
bonds attracted robust demand.
The Chinese
yuan trading offshore in Hong Kong was flat against the greenback at 7.0622 per
dollar, as markets deemed the statement from the latest Politburo meeting
released on Monday indicated that policymakers showed little urgency to roll
out additional stimulus measures.
The British
pound was slightly down at $1.3312, while the New Zealand dollar was up 0.3% at
US$0.5794.
In
cryptocurrencies, bitcoin slipped 0.1% to $91,601.48 while ether rose 0.5% to
$3,168.21.
(Reuters)
Only the
headline is edited by Shafaq News Agency.
