FX.co ★ Dollar Holds Steady as Fed Outlook Mulled

The dollar index remained relatively stable at approximately 99.6 on Wednesday, maintaining the gains it achieved earlier this week. This stability is due to diminished expectations of an immediate Federal Reserve interest rate reduction, as investors look forward to significant economic data for direction. Currently, market estimates suggest a 47% likelihood of a 25 basis point rate cut by December, a significant decrease from over 90% a month ago. Despite the inflationary threats, several Federal Reserve officials have advised against further rate cuts. However, Governor Christopher Waller has expressed continued support for reducing rates, citing evident signs of weakening in the labor market. Recent data from the Labor Department indicates initial jobless claims were at 232,000 for the week ending October 18, with continuing claims reaching 1.957 million, the highest level since August. The eagerly awaited September jobs report is scheduled for release on Thursday. Additionally, markets are keeping a close eye on earnings reports from major US retailers to gauge consumer spending patterns.