FX.co ★ US Dollar Extends Upswing

On Wednesday, the dollar index edged up to 99.8, nearing the five-month high of 100.2 reached earlier in November. This rise comes amidst moderated expectations regarding another interest rate cut by the Federal Reserve next month. Data on unemployment claims from late October suggested some stability in the job market, easing concerns about a significant weakening implied by private reports. Rate futures now reflect that half of the market anticipates the Federal Open Market Committee (FOMC) will maintain the current rates in their final decision of the year, a shift from last week's broad expectation of a 25 basis point reduction. The upcoming release of FOMC minutes from a contentious meeting may provide insights into a potentially divided Federal Reserve. Additionally, the dollar index gained from a weaker yen, influenced by Prime Minister Takaichi's announcement of aggressive stimulus measures impacting Japanese Government Bonds, which are likely to further increase the Bank of Japan's balance sheet.