US Dollar strengthens ahead of the US trading session.

US Dollar (USD) has returned to levels seen prior to the US Federal Reserve (Fed) meeting, and is even trending higher just before of the US trading session. Traders immediately reversed their initial losses on Wednesday after Fed Chairman Jerome Powell stated that a 50-basis-point (bps) rate decrease would not be the new normal, albeit the Greenback is falling further this Thursday. Going forward, it appears that economic data are ahead of each. The extent of the cut, if any, will be determined by the rate decision, which markets interpreted as relatively hawkish.

Traders expect weekly jobless claims to be stronger this week.

On the economic data front, traders view the prospects of another 50-basis-point rate decrease diminishing as the economic data points for Thursday come in stronger. The weekly jobless claims come in lower than predicted, at 219,000 vs 230,000. The Philadelphia Manufacturing Index returns to growth at 1.7, compared to the predicted contraction of -1.1.

Daily Market movers: US Dollar Return to range.

A quick overview of the Fed’s overnight rate decision: A 50-basis-point rate drop was implemented, with another 50 basis points predicted for the rest of 2024. Fed Chairman Powell underlined that 50 basis points of cuts will not be the new normal and The Fed will continue to rely on data to determine which rate cut magnitude is suitable for the upcoming meeting.
The Bank of England (BoE) has held its interest rate constant at 5% following an 8-1 vote, with one member requesting a rate drop. Governor Andrew Bailey stated that the BoE will progressively cut interest rates over time.
At 12:30 GMT, the weekly Jobless Claims report showed that Initial Claims were 219,000, lower than expected (230,000). Continuing Claims decreased to 1.829 million, down from 1.843 million earlier.
In addition to the flood of jobless data, the Philadelphia Fed Manufacturing Survey for September increased by 1.7 points, bringing it out of contraction. The expectation was for a -1 against -7 from last month.

Existing Home Sales for August came in lower than projected, with 3.86 million units versus the predicted 3.9 million.

At 14:00 GMT, Existing Home Sales for August came in lower than projected, with 3.86 million units versus the predicted 3.9 million. This figure had no significant impact on the markets.
The equity markets are having a field day following the Fed’s rate decision. In Japan, both the Nikkei and the Topix closed more than 2% higher. European indices are up more than 1%, while US futures show the Nasdaq outperforming by 2%, with the S&P 500 and Dow Jones following by roughly 1.5%.
The CME Fedwatch Tool indicates a 65.0% chance of a 25 basis point rate drop at the next Fed meeting on November 7. The remainder 35.0% is pricing in another 50 basis point rate drop.
The US 10-year benchmark rate is 3.75%, up from 3.60% on Wednesday and further from a 15-month low.