"The dollar index was up slightly on Wednesday ahead of two major catalysts, the Federal Reserve's policy decision and the meeting between US President Donald Trump and Chinese President Xi Jinping. Treasury yields rose slightly across maturities, with the 10-year hovering near the 4% threshold. On the trade front, Trump said from South Korea that he expects to secure a "great deal" with China during his meeting with Xi on Thursday. Expectations were building up after reports suggested progress on agricultural purchases and rare earth policy."
"At the same time, markets have fully priced in a 25-basis-point rate cut from the Fed, but investors are focused on Chair Jerome Powell's tone for signals about the pace of future easing. A more cautious message could support the dollar, while dovish guidance might reinforce expectations for another cut in December and drag both yields and the currency lower. Elsewhere, attention also turns to central bank meetings in Japan and the euro area on Thursday."
The dollar rose modestly as markets awaited the Federal Reserve's policy decision and a meeting between US and Chinese leaders. Treasury yields ticked higher, with the 10-year near 4%. Optimism about US-China trade progress, including agricultural purchases and rare earth policy, bolstered expectations for a positive outcome. Markets have priced in a 25-basis-point Fed rate cut, but investors are watching Chair Powell’s tone for clues on the path of future easing. A cautious Fed tone could lift the dollar, while dovish guidance could push yields and the currency lower. Central bank meetings in Japan and the euro area also drew attention.
Read at London Business News | Londonlovesbusiness.com
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