FX.co ★ Dollar Firms Up on Powell Remarks

The dollar index remained robust, maintaining levels above 99 on Thursday after a significant uptick the previous day. This movement followed Federal Reserve Chair Jerome Powell's hawkish remarks, which led traders to reduce their expectations for a December interest rate cut. On Wednesday, the Federal Reserve implemented a widely anticipated quarter-point rate reduction and disclosed plans to cease its balance sheet reduction by December 1. However, Powell emphasized that any further rate cut within the year is not a "foregone conclusion," pointing to internal disagreements within the central bank and the lack of comprehensive federal data due to the government shutdown. As a result, market participants now see less than a 70% likelihood of an additional rate cut by the end of the year, a decrease from the near certainty prior to Wednesday's announcement. In parallel, investors are closely monitoring the upcoming meeting between Presidents Trump and Xi, where the leaders are expected to solidify a trade agreement following months of ongoing tensions.