US Dollar trading slightly higher as speculation about an escalation in the Middle East crisis drives flows to the Greenback.
US Dollar (USD) is slightly up this Monday as three major variables provide some support for the Greenback. The first is geopolitical, with Israeli Prime Minister Benjamin Netanyahu promising to escalate reprisal following an Iranian drone strike near his private residence over the weekend. The second driver comes from the Federal Reserve (Fed). a few of its officials urged for a cautious approach to interest rate reductions (or even no rate cuts) to keep inflation under control. Finally, the forthcoming US presidential election on November 5, with former US President Donald Trump holding a slight lead on betting websites, supports a stronger US Dollar.
Fed speakers are beginning to accord with market forecasts of gradual to no rate reduction this year.
On Monday, there will be little economic data in the United States. Aside from the US Treasury’s plans to release additional debt into the markets, four Fed members will speak. Markets will be looking for further confirmation from the Fed on the rate decrease estimates for the meetings in November and December, after Atlanta Fed President Raphael Bostic said last week that The Fed should stop from cutting.
Daily Market movers: Everything is peaceful. If Donald Trump continues to lead in the polls, the US Dollar Index surge may gain momentum.
President Lorie Logan of the Federal Reserve Bank of Dallas will talk at 12:55 p.m. GMT. Logan takes part in a conversation during the 2024 SIFMA (Securities Industry and Financial Markets Association) Annual Meeting.
Moreover At 17:00 GMT, President Neel Kashkari of the Federal Reserve Bank of Minneapolis attends a town hall session held by the Chippewa Falls Chamber of Commerce in Chippewa Falls, Wisconsin.
Furthermore At 21:05 GMT, Federal Reserve Bank of Kansas City President Jeffrey Schmid speaks at a Chartered Financial Analyst Society event in Kansas City regarding the US economic and monetary policy prospects.
Mary Daly, President of the Federal Reserve Bank of San Francisco, will participate in a moderated Q&A session. Nick Timiraos of the Wall Street Journal will speak at the 2024 WSJ Tech Live at 22:40 GMT.
Moreover Equities are taking a turn for the worst, with US futures trading negative for the day.
The CME Fed rate expectation for the November 7 meeting shows a 92.3% probability of a 25 basis point (bps) rate cut, with the remaining 7.7% expecting no rate cut. Chances of a 50 basis point rate drop have been totally priced out.
The US 10-year benchmark rate is currently trading at 4.11%, having flirted with a break below 4% on Wednesday.
