Dollar recoups losses as markets await Fed minutes, speakers
TLT•The dollar index rose 0.16% to 102.07 as markets awaited September Fed minutes and policymaker speeches. October rate-hike odds fell to 20.5% from about 51% a week earlier, while December hike odds stood at 84.5%.
1. Dollar edges higher
The US dollar recovered some losses on Wednesday as markets awaited the Federal Reserve’s September meeting minutes and comments from policymakers for clues on a potential rate hike. The dollar index rose 0.16% to 102.07 after falling 0.27% on Tuesday. The euro fell 0.25% to $1.123, the yen weakened 0.19% to 158.39 per dollar, and sterling lost 0.21% to $1.3244.
2. Rate expectations shift
Softer-than-expected US PCE data and jobs figures have reduced expectations of an imminent Fed hike. Markets priced a 20.5% chance of a hike of at least 25 basis points in October, down from about 51% a week earlier, and an 84.5% chance of a hike in December. Fed officials Christopher Waller, Neel Kashkari and Alberto Musalem were due to speak later Wednesday.
3. Other market moves
The dollar also drew safe-haven demand after Yemen’s Iran-aligned Houthis attacked Aden International Airport. Bank of Japan policymaker Ayano Sato said she supported raising rates in several stages. The Australian dollar fell 0.14% against the greenback to $0.6972, while the New Zealand dollar declined 0.28% to $0.5605.
