The US dollar index stabilized around 99.5, halting gains from the previous sessions. Traders are exercising caution ahead of significant economic data releases. Concerns linger about how upcoming jobs data might impact the Federal Reserve’s future decisions regarding interest rate cuts, particularly given the expressed skepticism from several policymakers regarding the need for additional easing.
- The dollar index stabilized around 99.5.
- Initial jobless claims were reported at 232K for the week ended October 18.
- Continuing claims reached 1.957 million, the highest level since August.
- The jobs report is scheduled for release on Thursday.
- The market currently assigns roughly a 46% probability of a 25 bps rate cut next month.
- The dollar was largely unchanged against major currencies but traded mostly higher against the Swiss franc and the yen.
The dollar’s near-term direction hinges on the imminent economic data and its potential influence on the Federal Reserve’s monetary policy. The market’s pricing suggests uncertainty around the likelihood of further rate cuts. How this economic data affects rate cut expectations will likely dictate the dollar’s movement against other currencies.