US dollar may strengthen with potential increase in inflation, while market sees chance of Fed pause

From Investing.com: 2024-11-27 06:12:00

Dollar traders are closely watching PCE inflation data, which could impact Fed’s pause chances. S&P 500 and Dow Jones hit record highs, while gold rebounds. Market participants still see a 37% chance of Fed pausing in December and a 57% chance in January. US PCE inflation expected to rise to 2.8% y/y in October. A potential increase in inflation could lead to Fed stepping to the sidelines, boosting the US dollar.

Kiwi rallies after RBNZ cuts rates by 50bps, disappointing some. Yen strengthens as safe-haven asset amidst concerns over US-China trade tensions. Market predicts 15bps rate hike in December and 22bps by January. Japan’s inflation numbers for November to be closely monitored for signs of consumer prices. Strong inflation data may prompt BoJ to hike rates in December and January.

Wall Street ignores Trump’s tariff threats, with all three indices moving higher. S&P 500 and Dow Jones reach record highs. Fed minutes hint at a possible December pause. Gold rebounds amidst US dollar weakness and investor concerns over tariffs. Ceasefire between Israel and Hezbollah may have contributed to gold’s rise.



Read more at Investing.com: US Dollar Awaits PCE Insights; Prepare for Adjustments Based on Fed Policy Signals