The U.S. dollar has emerged as a leader in growth against the euro, pound, yen, and other risk assets. According to the minutes of the Federal Reserve's Federal Open Market Committee meeting held on October 28–29, many Federal Reserve officials stated that it would likely be appropriate to keep interest rates unchanged until the end of 2025.
"Many participants noted that, based on their economic outlook, it would likely be appropriate to leave the target range unchanged through the end of the year," the minutes said. This decision is expected to support the U.S. currency, making it a more attractive asset for investors seeking stability and predictability amid global economic uncertainty. Considering that other major central banks, such as the European Central Bank and the Bank of England, are showing a more flexible stance regarding monetary policy, the dollar may maintain its advantage in the near term. However, market participants should keep in mind that the situation could change if U.S. inflation begins to accelerate or if other factors, such as a sharp decline in the labor market, put pressure on the dollar. In particular, any signs of weakening in the U.S. economy may force the Federal Reserve to reconsider its current stance and consider lowering interest rates, which could potentially weaken the dollar.
The minutes, published on Wednesday, showed that several policymakers opposed lowering the Fed's benchmark rate at this meeting. Nevertheless, some participants indicated that another rate cut could be appropriate in December if the economy developed as they expected.
The minutes highlight the uncertainty regarding the likelihood of a rate cut next month, given the ongoing disagreements within the committee about what poses a greater threat to the U.S. economy—inflation or unemployment.
As a reminder, a majority of committee voters at the meeting agreed to cut interest rates by a quarter percentage point for the second consecutive time, although two officials dissented. Governor Stephen Miran, recently appointed by President Trump, voted for a half-point rate cut. Kansas City Fed President Jeff Schmid argued for keeping rates unchanged. At the press conference following the meeting, Fed Chair Jerome Powell surprised investors by warning that another rate cut in December was not a predetermined decision.
Over the subsequent three weeks, Federal Reserve officials who are more concerned about inflation and less inclined to support another rate cut in December dominated public discussions about future monetary policy actions.
Additionally, yesterday the U.S. government canceled the release of the October employment report because some data could not be collected during the government shutdown. Today, only the labor market reports for this year's October will be published, while the October data will be released after December 16 together with the November figures.
Against this backdrop, investors have reduced their expectations for a December rate cut, which has strengthened the dollar.
As for the current technical picture of EUR/USD, buyers now need to think about reclaiming the 1.1525 level. Only this will allow them to target a test of 1.1545. From there, it may be possible to reach 1.1570, although doing so without support from large players will be quite difficult. The furthest target is the 1.1585 high. In the event the trading instrument declines, I expect any significant buyer activity only around the 1.1500 level. If no one steps in there, it would be best to wait for a renewal of the 1.1470 low or consider opening long positions from 1.1430.
As for the current technical picture of GBP/USD, pound buyers need to reclaim the nearest resistance at 1.3070. Only this will allow them to aim for 1.3100, above which a breakout will be quite difficult. The furthest target is the 1.3125 level. If the pair falls, the bears will attempt to regain control over 1.3030. If they succeed, a breakout of this range will deal a serious blow to bull positions and push GBP/USD toward the 1.3000 low, with the prospect of reaching 1.2975.
