The US Dollar Index (DXY) is steady on Wednesday after a three-day advance, trading around 99.60 during European hours. The Greenback may find additional support as the probability of a December rate cut from the US Federal Reserve (Fed) continues to decline.
Fed rate-cut odds retreat
According to the CME FedWatch Tool, markets now assign a 49% chance of a 25-basis-point cut at the December meeting—down sharply from the 63% probability seen just one week earlier. The shift reflects growing scepticism that policymakers have enough evidence to justify easing in the near term.
Key labour data in focus
Traders are now looking ahead to Thursday’s highly anticipated September Nonfarm Payrolls report for clearer direction on the Fed’s policy outlook. Earlier this week, US Initial Jobless Claims showed that 232,000 individuals filed for unemployment benefits in the week ending October 18. Meanwhile, the latest ADP data signalled that employers cut an average of 2,500 jobs per week over the four weeks ending November 1.
Fed’s Barkin urges caution
Richmond Fed President Thomas Barkin said Tuesday that the labour market appears more balanced, citing improved worker availability and recent layoffs as signals that businesses are adjusting. Barkin added that while inflation is not accelerating, it remains uncertain whether price pressures will return to the Fed’s 2% target. He emphasised that the lack of clearer data makes it difficult for officials to reach a firm policy consensus.
Trump says he “would love” to remove Powell
In a separate development, US President Donald Trump said in an Oval Office interview on Tuesday that he “would love” to remove Fed Chair Jerome Powell immediately. Trump noted he already has a preferred candidate in mind and suggested there are “some surprising names” under consideration, though he acknowledged the administration may ultimately opt for a more traditional choice.
