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FX Week Ahead: DXY gains for third consecutive week
The United States dollar index (DXY) lifted for the third straight week, despite intermittent support from firm U.S. economic data and cautious Federal Reserve rhetoric. The DXY added 0.2% over the week to finish at 99.38 on Friday, with markets reluctant to add exposure ahead of a long holiday weekend in the United States, correcting from a six-week high near 99.49. Dollar sentiment was briefly underpinned earlier in the week after Kansas City Fed President Jeffrey Schmid and Atlanta Fed President Raphael Bostic reiterated the need for a modestly restrictive monetary policy stance amid persistent inflation risks. Schmid warned that premature rate cuts could aggravate price pressures, noting that inflation remained “too hot” to justify aggressive easing. December U.S. consumer price index data last week showed price pressures holding steady, reinforcing expectations that the Federal Reserve will proceed cautiously. Meanwhile, analysts at ING said the U.S. dollar’s recent firmness reflects a broader macro repricing, driven by resilient U.S. data, rising Treasury yields and strong foreign inflows into U.S. assets. They added that meaningful dollar weakness would likely require lower U.S. rates or increased foreign
Currencies
FX Week Ahead: DXY falls to multi-month lows
The United States dollar index (DXY) declined 0.7% last week, hovering at multi-month lows of 98.05 as markets continued to price in a more accommodative Federal Reserve policy outlook for 2026. Holiday-thinned trading conditions kept moves relatively contained, but sentiment remained tilted against the Greenback amid expectations of two U.S. rate cuts next year. Despite a rebound in U.S. Treasury yields, the DXY struggled to attract sustained demand. The 2-year and 10-year yields rose back towards 3.53% and 4.16% respectively, although markets continued to judge that stronger economic data would not prevent policy easing further out. U.S. economic releases were also mixed for the dollar. Preliminary data showed annualised gross domestic product (GDP) growth of 4.3% in the July–September quarter, well above expectations and the previous quarter’s 3.8% expansion, while the core PCE price index rose 2.9% quarter-on-quarter, in line with forecasts. However, commentary from the White House added to pressure on the currency. White House adviser Kevin Hassett said the Fed was cutting rates too slowly despite the stronger-than-expected growth outcome, according to CNBC. Fed Governor Stephen Miran also warned that failing t
Currencies
FX Week Ahead: US dollar ticks up after CPI surprise
The United States dollar index finished last week higher, up 0.3% at 98.72 on Friday, and snapped three consecutive weeks of declines. Gains in the U.S. dollar index (DXY) were modest, as markets continued to digest signs that inflation pressures in the United States are easing faster than expected. The latest consumer price index data briefly weighed on the Greenback after the U.S. Bureau of Labor Statistics reported that headline CPI slowed to 2.7% in November, below market expectations of 3.1%. Core CPI, which strips out food and energy prices, rose 2.6%, also undershooting forecasts of 3.0% and marking the slowest pace of underlying inflation since 2021. Some doubts about the durability of the inflation slowdown emerged on Friday, after New York Fed President John Williams said CPI figures “may have been pushed down a bit” in comments to CNBC. Earlier last week, the Federal Reserve delivered a widely expected 25-basis-point interest rate cut, reinforcing expectations that policy is shifting gradually towards easier settings. Labour market data sent mixed signals. Initial jobless claims fell to 224,000, better than expectations of 225,000, though broader indicators still point to a gradual cooling in employmen
Currencies
FX Week Ahead: DXY slides for 3rd week; data risks loom
The United States dollar index (DXY) ended lower for the third consecutive week after the Federal Reserve moved in line with market expectations and cut interest rates by 25 basis points, reinforcing the view that U.S. monetary policy has shifted into a gradual easing phase. The DXY touched fresh two-month lows during the week and remains on track to record a second straight monthly decline. Markets had largely priced in the Federal Reserve’s decision to lower the federal funds target range to 3.50%–3.75%, but sentiment towards the greenback softened further after policymakers announced a renewed balance sheet expansion. The Fed said it would begin purchasing US$40 billion of Treasury bills per month, signalling a willingness to support liquidity as growth momentum cools. The rate cut was not framed as a declaration of victory over inflation, but rather as an acknowledgement that the labour market is losing momentum and that the risks of waiting too long to ease policy are beginning to outweigh the risks of moving slightly earlier. While inflation is still not fully aligned with the Fed’s target, officials appear increasingly comfortable that remaining price pressures are driven by temporary factors, including tarif
Currencies
FX Week Ahead: DXY extends losses amid dovish Fed
The United States dollar endured another challenging week, with the U.S. dollar index (DXY) closing down 0.5% and slipping through key support at 99.00. Despite a modest rebound in Treasury yields across the curve, the Greenback remained firmly offered as traders strengthened bets on a further rate reduction by the Federal Reserve at next week’s meeting. Expectations of a more dovish policy path beyond 2026 — after Chair Jerome Powell’s term ends — added further downward pressure. The outlook for the dollar has been clouded by mixed commentary from policymakers, leaving markets unsure about the pace of rate cuts. Friday’s data offered little clarity: inflation aligned broadly with forecasts, while the University of Michigan’s consumer sentiment survey showed a modest improvement. Even so, markets remain convinced that easing is imminent. Futures imply an 86.2% probability of a cut on 10 December, with roughly 80 basis points of further easing priced in by the end of 2026, according to the CME Group FedWatch Tool.Euro holds at 1.164 as Fed and ECB narratives take the stageThe EUR/USD currency pair steadied around 1.164 on Friday, leaving the pair up 0.4% for the week as traders positioned ahead of the Fed decision.

Currencies
Japan's Katayama: Yen moves diverge from fundamentals
Japan’s finance minister Satsuki Katayama said it is “clear” that volatile swings in the foreign exchange market and rapidly weakening yen aren’t “moving based on fundamentals”. When she made her comments during a Fuji TV program in Japan, Katayama said she wouldn’t comment on specific yen levels. In the past, she said it’s important for the yen to move stably reflecting fundamentals. The issuance of Japanese government bonds is being managed, and credit default swaps and ratings remain unchanged, Katayama said. She also added that she doesn't think there will be a snap election as there are other priorities, including the debate over taxes and fiscal 2026. According to Bloomberg, the yen has weakened by around 6% against the U.S. dollar in the past three months. Katayama reiterated that a currency intervention remains possible to address the yen's volatile moves, in line with the Japan-U.S. joint statement in September, which said exchange rates should be market-determined.
Currencies
FX Week Ahead: DXY weaker as Fed cut odds near 90%
The United States dollar index (DXY) started the week slightly down, after settling near two-week lows of 99.50 on Friday as investors continued to price in a markedly more dovish Federal Reserve stance. Market expectations for lower U.S. rates strengthened after comments from New York Fed President John Williams, who said there was room for “a further adjustment in the near term to the target range for the federal funds rate”. That helped lift the probability of a 25-basis-point cut at the December meeting to more than 87%, up from 39% one week earlier, according to the CME FedWatch tool. Additional speculation arose after reports suggested Kevin Hassett is the frontrunner for the role of Federal Reserve Chair, with traders perceiving him as aligned with U.S. President Donald Trump’s preference for lower interest rates. Economic data did little to change the narrative. Initial jobless claims fell to 216,000 for the week ending 22 November, beating expectations of 225,000, while producer inflation stabilised in September. Meanwhile on Sunday evening (Monday AEDT), U.S. and Ukrainian officials concluded around four hours of talks aimed at advancing a potential peace deal between Russia and Ukraine. The discussions
Currencies
FX Week Ahead: DXY steady below fresh 6mth highs
The United States dollar index (DXY) began the week steady at 100.196, holding just below the six-month high of 100.395 reached on Friday. The index rose 0.9% over the previous week as delayed U.S. economic data and dovish remarks from Federal Reserve official Williams boosted expectations of a December rate cut. U.S. labour data released late due to the government shutdown showed stronger-than-expected jobs growth for September, but a higher unemployment rate and downward revisions to previous months painted a more mixed picture. The prolonged shutdown has also delayed key economic indicators, including inflation data, adding uncertainty to the near-term outlook for the U.S. dollar. According to the CME Group FedWatch Tool, market pricing now reflects a 69.4% chance of a 25 bps rate cut in December, up from 63% a week earlier.Eurozone momentum weakensEUR/USD opened the week flat at 1.15102 after a 1% weekly decline. The U.S. dollar wavered following the delayed non-farm payroll report, though the data offered limited clarity given its age and partial October–November readings hinting at further labour market deterioration. The positive payroll numbers did little to shift expectations ahead of the Federal Reserve’s
Currencies
FX Week Ahead: DXY ticks lower; Fed cut doubts build
The United States dollar index (DXY) started the week steady at 99.27, after ending Friday's session around two-week lows as traders braced for a backlog of delayed U.S. economic data following the government’s reopening. Investors expect forthcoming figures to reveal a weakening economy, which continues to pressure the Greenback. President Donald Trump signed the House-passed funding package late Thursday, officially ending the record 43-day government shutdown. The bill extends funding for most agencies until 30 January and fully funds others for the year. Markets anticipate that resumed U.S. dataflow will highlight labour market cooling and a broader slowdown. The White House has already warned that the October unemployment rate may never be released due to missing household survey inputs. Rate expectations also shifted lower. CME Group FedWatch Tool now indicates a 44.4% probability of a 25 bps cut at the December Federal Reserve meeting, down sharply from 62.9% last week. Hawkish commentary, however, limited further the U.S. dollar's downside. Boston Fed President Susan Collins said policy rates may need to stay “on hold for some time”, while Raphael Bostic and Beth Hammack also emphasised they favour keepin