{"id":15472,"date":"2024-10-23T07:11:27","date_gmt":"2024-10-23T07:11:27","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=15472"},"modified":"2024-10-23T07:11:27","modified_gmt":"2024-10-23T07:11:27","slug":"fed-outlook-lifts-dollar-yen-falls","status":"publish","type":"post","link":"https:\/\/www.global-vtrader.com\/en\/analysis\/fed-outlook-lifts-dollar-yen-falls\/","title":{"rendered":"Fed Outlook Lifts Dollar; Yen Falls"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\"><strong>Key points:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Yen hits three-month low amid rising U.S. Treasury yields.<\/li>\n\n\n\n<li>Fed&#8217;s Beige Book tops economic calendar on Wednesday.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p class=\"wp-block-paragraph\">The U.S. dollar stayed firm on Wednesday, reaching its highest level in over two months. Market participants have adjusted their expectations for the Federal Reserve, now betting on a more gradual reduction in interest rates.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This shift comes as recent economic data has been stronger than anticipated, causing traders to reassess the likelihood of aggressive rate cuts.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><strong>Yen Hits Three-Month Low as U.S. Yields Rise, Rate Cut Hopes Fade<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The yen has come under considerable pressure, dropping to a three-month low of 151.72 against the dollar. This decline has been fuelled by rising U.S. Treasury yields, with the 10-year note reaching 4.222%, its highest point since July. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Expectations of a rate cut in November have also softened, with a 91% chance now priced in for a quarter-basis-point cut, compared to more divided views a month ago.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/wp-content\/uploads\/2024\/10\/image-46-1024x465.jpeg\" alt=\"\" class=\"wp-image-15474\" style=\"width:1450px;height:auto\" \/><\/figure>\n\n\n\n<p class=\"has-text-align-center wp-block-paragraph\"><em>Picture: The USD\/JPY chart shows a bullish trend with the price near a key resistance at 151.673 as seen on the <a href=\"https:\/\/vtmarketsapp.onelink.me\/CD7D\/240525WA\">VT Markets app<\/a>.<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Economic data remains relatively light, but market participants are keeping a close eye on the release of the Fed\u2019s Beige Book, which will provide insight into U.S. economic conditions. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The last report highlighted slowing growth, though recent data suggests a more optimistic picture might emerge this time. If the report surprises to the upside, it could further support the dollar and <strong><a href=\"https:\/\/www.vtmarkets.com\/analysis\/asian-stocks-fall-as-bond-yields-rise\/\">push yields higher<\/a>. <\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">However, traders are cautious, with marginal gains in both the dollar index and U.S. yields signalling a more measured approach.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The dollar index, which tracks the greenback against six major currencies, edged up by 0.11%, reaching 104.18. So far, the index has gained over 3% this month, buoyed by the changing outlook on Fed policy.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\"><strong>Republican Sweep Seen as Dollar Boost, Harris Win May Shift Market Outlook<\/strong><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Looking ahead to the U.S. presidential election, traders are also factoring in the potential for a Republican sweep, which is widely seen as bullish for the dollar. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A recent poll shows Vice President Kamala Harris with a slim 46% to 43% lead over Donald Trump, but markets are still largely pricing in a Trump victory. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Should the tide shift toward a Harris win, traders might begin to price in a pullback in both the dollar and Treasury yields, given her less inflationary stance on policy.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Vice President Kamala Harris holds a narrow 46% to 43% lead over Donald Trump, with voters expressing dissatisfaction with the country\u2019s direction, according to a Reuters\/Ipsos poll. <a href=\"https:\/\/t.co\/QNAlIyOSN5\">https:\/\/t.co\/QNAlIyOSN5<\/a><\/p>&mdash; The Jerusalem Post (@Jerusalem_Post) <a href=\"https:\/\/twitter.com\/Jerusalem_Post\/status\/1848683005570641973?ref_src=twsrc%5Etfw\">October 22, 2024<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">The yen\u2019s weakness could be exacerbated by upcoming political events in Japan, where the general election on 27 October could disrupt the ruling coalition. <\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>See also: <a href=\"https:\/\/www.vtmarkets.com\/analysis\/japans-nikkei-slips-due-to-election-jitters\/\">Japan\u2019s Nikkei Slips Due to Election Jitters<\/a><\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The prospect of a weaker government raises concerns over the Bank of Japan&#8217;s ability to reduce monetary stimulus, adding further pressure to the yen.<br><strong><br>Start trading now \u2014 click <\/strong><a href=\"https:\/\/www.vtmarkets.com\/trade-now\/?utm_campaign=account_c&amp;utm_source=dma&amp;utm_medium=website\"><strong>here<\/strong><\/a><strong> to create your live VT Markets account.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The dollar holds a 2.5-month high as Fed rate stance and U.S. election lift Treasury yields, pushing the yen to a 3-month low. &#8211; vtmarkets.com<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[27],"tags":[28,12,30],"class_list":["post-15472","post","type-post","status-publish","format-standard","hentry","category-analysis","tag-dollar","tag-forex","tag-yen"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/posts\/15472","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/comments?post=15472"}],"version-history":[{"count":0,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/posts\/15472\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/media?parent=15472"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/categories?post=15472"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.global-vtrader.com\/en\/wp-json\/wp\/v2\/tags?post=15472"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}