The dollar has been declining for two consecutive days, just like the yields of 10-year and 30-year U.S. bonds.
The drop in yields has not yet altered the trajectory of the dollar. To significantly reduce the dollar's intensity, a much more significant decrease in U.S. bond yields must occur.
It's clear that market participants are still concerned about the actions of the Federal Reserve. According to the CME FedWatch tool, the probability of the Federal Reserve raising the base rate at the November FOMC meeting is only 19.6%.
The probability that the Fed will carry out its final rate hike of the year in December is 29.4%, with an additional 3.2% probability that the Fed will also raise rates in December by a certain percentage.
This means that market participants' concern is not whether the Fed will raise rates again this year but on how long they will remain elevated. Additionally, the Fed's statement at the September FOMC meeting that it plans to raise rates less next year than expected is also worrying the markets.
On Friday, the report on non-farm employment in the U.S. will be released, which could help determine whether the Federal Reserve will raise interest rates again next month.
In the table, you can track the percentage change in the U.S. dollar exchange rate today against major currencies.
As of today, the dollar has shown its greatest strength against the Japanese yen.
