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Hello everyone, today XM Forex will bring you "[XM Forex]: Alert! The Fed's rate cut frenzy is www.xmasseuse.coming, the U.S. dollar index is weak. Pay attention to Powell's speech." Hope this helps you! The original content is as follows:
The U.S. dollar index fluctuated during the Asian session on Tuesday. Market expectations that the Federal Reserve will cut interest rates in December continue to increase, further putting downward pressure on the U.S. dollar. According to the CME Group's FedWatch tool, traders expect the probability of the Fed cutting interest rates by 25 basis points next week has risen to 87%. In addition, there are reports that the dovish White House economic adviser Hassett may become the next chairman of the Federal Reserve, which also exacerbates the weakness of the dollar.
U.S. dollar: As of press time, the U.S. dollar index is hovering around 99.46. ISM manufacturing data is weak. The market’s pricing probability of the Federal Reserve cutting interest rates next week has risen to 87%. The U.S. dollar index (DXY) is testing key support levels. As December progresses, weak data further intensifies downward pressure on the dollar. Technically, the U.S. dollar index fell slightly, and bears continued to test key support areas. Once it breaks through, it may trigger a larger decline. The index is currently approaching the 50-day moving average of 99.047 and the shock low of 98.991. If both fall below it, it will not only mean that the trend of the US dollar has weakened, but may also trigger liquidation orders and a new wave of selling. The next downward target will point to the callback range of 98.307-97.814. Currently, the dollar’s path of least resistance remains biased to the downside as long as prices remain below the 200-day moving average at 99.669.
The Federal Reserve stated that it is paying close attention to the relevant investment portfolios of www.xmasseuse.community and regional banks due to concerns about “high interest rates, tightening underwriting standards and declining www.xmasseuse.commercial real estate values.” In a regulatory report released on Monday, the Fed said the factors could affect borrowers' ability to refinance or pay off their loans. Regulators are closely watching www.xmasseuse.commercial real estate lending trends and closely reviewing underwriting practices and credit loss reserve levels. As far as Wall Street is concerned, the Fed's focus is on weaknesses in its capital planning and liquidity risk management. However, the report showed that the capital levels of the vast majority of banks remained well above applicable regulatory requirements as of the second quarter. "The stress test results demonstrate the ability of large banks to respond to a severe recession and lend to households and businesses while maintaining minimum capital requirements," the report states.
The Trump administration has reached an agreement with the UK to allow UK drugs to enter the US duty-free in exchange for drug manufacturingBusinesses have significantly reduced the return of funds to the British National Health Service (NHS). The Office of the U.S. Trade Representative announced on Monday that the United States has agreed to "exempt Section 232 tariffs on drugs, pharmaceutical raw materials, and medical technologies originating in the United Kingdom." The statement also said the United States would also "refrain from targeting the UK's drug pricing practices" in certain trade investigations during President Donald Trump's term. While the United States and Britain earlier this year agreed on a trade framework that set broad tariff rates on British goods, the two countries have yet to resolve issues including treatment of key products such as pharmaceuticals. According to the Office of the United States Trade Representative, the UK will increase the www.xmasseuse.com price it pays for new drugs by 25%. Some of the world's largest drug www.xmasseuse.companies have long criticized the British government's pricing methods and the NHS's cash rebate mechanism to control costs. People familiar with the matter revealed before the announcement that the agreement will reduce the rebate rate on drug sales from the current approximately 23% to a maximum of 15%.
According to www.xmasseuse.comN citing people familiar with the matter, US President Trump will hold a meeting at the White House on Monday evening local time to discuss the next step towards Venezuela. It is reported that the meeting is scheduled to be held in the Office of the President at 5 pm Eastern Time (6 am Beijing time on Tuesday). U.S. Secretary of Defense Pete Hegseth, Chairman of the Joint Chiefs of Staff General Dan Kaine, Secretary of State Marco Rubio and other core members of the cabinet and national security team are expected to attend the meeting. White House Chief of Staff Susie Wiles and Deputy Chief of Staff Stephen Miller will also attend. The meeting www.xmasseuse.comes as the United States steps up pressure on Venezuela by cracking down on drug vessels and beefing up its military presence in the Caribbean. Over the weekend, Trump also issued broad directives on social media, warning airlines, pilots and criminal organizations to avoid Venezuelan airspace.
The market is preparing for the possible last interest rate cut of the year by the Federal Reserve, and it is difficult for the US dollar to find support. Futures market data shows that the probability of a 25 basis point interest rate cut at next week's meeting has risen to 87% from 63% a month ago. This near-certain expectation continues to put pressure on the dollar. However, the policy direction after December remains unclear. Money markets indicate that the possibility of another interest rate cut before next spring is low, and some analysts have put forward the view of a "hawkish interest rate cut" - that is, while cutting interest rates, policymakers send a signal that they are not in a hurry to further ease. Goldman Sachs economists made it clear: Given that the December interest rate cut has basically been priced in by the market, investors’ attention will turn to subsequent policy developments. They believe that the market has not fully priced in the first quarter of next year, especially with a series of labor data released before the January meeting.
Golden Ten Data reported on December 2 that Federal Reserve Chairman Powell’s speech at Stanford University tonight clearly avoided monetary policy and economic prospects as expected, because there is official silence before next week’s Fed policy meetingExpect. At an event honoring late former Secretary of State George Shultz, Powell praised Shultz for his pragmatic approach to public policy, his work eliminating discrimination in the workplace and his integrity. "He often said that trust is the foundation of our country and that good things are possible only on the basis of mutual trust," Powell said, according to a published transcript of his speech. "His integrity provided the basis for that trust."
Berenberg Bank economist Andrew Wishet pointed out in a report that the Bank of England may suspend interest rate cuts after the December meeting (the market is generally expected to cut interest rates by 25 basis points). Wischet said that given the risk of upward inflation, the Bank of England is expected to enter a "wait-and-see mode" after the December resolution and will not cut interest rates again until the second quarter of 2026.
According to UBS’s calculations based on balance sheet data, although the Swiss franc has risen sharply as a safe-haven asset, the Swiss National Bank may not have intervened in the market in October. Florian Gemanier, an economist at the bank in Zurich, estimated that the SNB's transaction size for the month ranged from buying 20 million Swiss francs (about 25 million U.S. dollars) worth of foreign exchange to selling 50 million Swiss francs, well below the 5.1 billion Swiss franc intervention scale in the second quarter. "There is no sign that the SNB has intervened," said Gmanier. "This range of data suggests that officials have not taken action - in past intervention periods, balance sheet data would have shown a much stronger signal." Gmanier added that the SNB may still intervene in the market in November in response to the Swiss franc hitting a ten-year high after the signing of the Swiss-US trade agreement. He noted that volatility in Swiss currency markets during mid-November when the Swiss franc rose to its highest level since January 2015, when the Swiss National Bank lifted its exchange rate cap, may have signaled intervention. "We have observed some market fluctuations that can be explained by intervention measures," he said, "but this may also be driven by other factors."
Ebury strategist Enrique Dias-Alvarez pointed out in the report that with the British budget last week clarifying the government's fiscal measures, the pound may appreciate before the end of the year. "The elimination of budget uncertainty may provide room for the pound to rebound before the end of the year." However, he also said that political risks still exist after reports that British Finance Minister Reeves may have misrepresented the size of the fiscal deficit.
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