In light of the recently disclosed Federal Reserve meeting minutes, which showed some opposition to a 50 basis point rate cut, the US dollar has managed to maintain its upward momentum. Traders' focus has now shifted to the US inflation report scheduled for release on Thursday. The Japanese yen weakened, approaching the 1 US dollar to 150 Japanese yen threshold. Following the Reserve Bank of New Zealand's acceleration of monetary easing, the New Zealand dollar performed the worst.
The Bloomberg Dollar Index rose by 0.4%; it has been increasing for eight consecutive trading days, setting the longest streak since April 2022.
The Federal Reserve meeting minutes indicated, "Some participants noted that there were valid reasons to cut rates by 25 basis points at the previous meeting."
"This aligns with the view of many, including myself, that the 50 basis point move was to make up for the inaction in July," said Win Thin, Global Head of Currency Strategy at Brown Brothers Harriman.
Forecasters expect the government's monthly report to show a deceleration in key inflation indicators, providing more clues for the pace of further rate cuts by the Federal Reserve.
Mark Dowding, Chief Investment Officer at BlueeBay Asset Management, stated that given the policy plans of both US presidential candidates would likely increase inflation, there is a risk that the Federal Reserve may have to raise interest rates next year.
The US dollar/Japanese yen increased by 0.7%, reaching 149.30.
"The US dollar/Japanese yen is gradually rising, approaching 150, and the pair is currently above the 'fair value' level implied by the interest rate differential," said Yusuke Miyairi, a foreign exchange strategist at Nomura International, "We still believe that the likelihood of a significant breakthrough above 150 may be limited."
The British pound/dollar fell by 0.3%, to 1.3070.
The euro/pound slightly declined to 0.8369; Francois Villeroy de Galhau, a member of the European Central Bank's Governing Council, stated that the ECB is highly likely to cut interest rates next week and will likely ease monetary policy again at future meetings, depending on the progress in curbing price increases.The New Zealand dollar fell to its lowest level since August 19th, following the country's central bank's acceleration in easing measures due to growing concerns about economic slowdown.
The New Zealand dollar to US dollar exchange rate decreased by 1.4%, reaching 0.6056; the New Zealand dollar to euro exchange rate fell by approximately 1%.
Citi forecasts that the Reserve Bank of New Zealand will cut interest rates by 75 basis points in November.
The Australian dollar to New Zealand dollar exchange rate increased by 0.9%, reaching 1.1088.
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