31.10.202514:00:02UTC+00Dollar Set to Close October on a Strong Note

The dollar index advanced for the third consecutive session on Friday, nearing 99.8—its highest point since early August—and is poised to end October with an approximate 1.8% increase. This surge is underscored by the Federal Reserve's recent hawkish rhetoric. Although the Fed implemented a widely anticipated 25 basis point rate cut, Chair Jerome Powell stressed that another rate reduction in December is not a certainty. Consequently, the market's perceived likelihood of a December rate cut plummeted to about 63%, down from approximately 90% before the meeting.

Simultaneously, the meeting between President Trump and President Xi resulted in the US agreeing to reduce tariffs on Chinese imports, while China committed to decreasing fentanyl exports, increasing purchases of US soybeans, and halting restrictions on rare earth exports. In other news, the US government shutdown continues with no resolution in sight, causing delays in the publication of crucial economic data. The dollar also appreciated significantly, strengthening approximately 4% against the yen following the election of Prime Minister Takaichi, and gained around 2% against the British pound and 1.4% against the euro.