Last week’s rapid dollar sell-off stabilised with a bounce on Friday. Expectations have shifted for the December FOMC meeting, with a 50% chance of a 25bp rate cut now priced in. <\/p>\n
The Federal Reserve may prefer this pricing due to limited data. Wednesday’s FOMC minutes and Thursday’s September jobs report, expecting a 50k payroll gain and 4.3% unemployment, will likely influence the dollar’s direction. <\/p>\n
Numerous speeches by Federal Reserve officials are scheduled this week. Philip Jefferson’s upcoming speech might reinforce the recent message against hasty rate cuts, potentially supporting the dollar’s recent strength. <\/p>\n
The dollar index might maintain its rebound, potentially moving towards the 99.50\/65 area. The FXStreet Insights Team curates market analyses from experts and additional insights from various analysts.<\/p>\n
It appears the dollar’s sell-off last week went too far, and Friday’s bounce was a necessary correction. We’ve seen market pricing for a December 10th Federal Reserve rate cut pull back to roughly a 50\/50 probability, a level the Fed is likely more comfortable with. Recent data from late October 2025 showed Core PCE inflation holding firmer than expected at 3.1%, making the case for an immediate cut less compelling.<\/p>\n
This week, we will get more clarity from the minutes of the late October FOMC meeting, which should reinforce the message that a December cut is not guaranteed. Fed speakers are also out in force, and we expect them to echo a patient approach, which should provide a floor for the dollar. This steady messaging is designed to prevent the market from getting ahead of itself on rate-cut expectations.<\/p>\n
The major event will be Thursday’s jobs report, with consensus expecting a gain of 50,000 payrolls and the unemployment rate holding at 4.3%. After the more volatile job markets we saw through 2023 and 2024, a number like this is viewed as neutral, as it isn’t weak enough to force the Fed into action. We are also watching Wednesday’s Nvidia earnings as a key gauge of broader market risk sentiment.<\/p>\n
For derivative traders, this outlook suggests considering strategies that benefit from a modest, short-term rise in the dollar. This could involve buying short-dated call options on the DXY or put options on pairs like EUR\/USD, targeting a move towards the 99.50 to 99.65 area. Since the rally is expected to be limited, selling out-of-the-money call spreads could also be a way to capitalize on a capped upside.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" Dollar stabilizes after sell-off; Fed rate speculations and key data releases to steer upcoming market moves.<\/p>\n","protected":false},"author":62,"featured_media":16960,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-35116","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/35116","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=35116"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/35116\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16960"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=35116"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=35116"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=35116"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}