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The U.S. dollar index rebounded, with Federal Reserve Chairman Powell, RBA meeting minutes and British employment data in focus
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Hello everyone, today XM Forex will bring you "[XM Foreign Exchange Market xmspot.commentary]: The U.S. dollar index rebounded, Fed Chairman Powell, RBA meeting minutes and British employment data became the focus." Hope this helps you! The original content is as follows:
The U.S. dollar index hovered around 99.35 in Asian trading on Tuesday. The U.S. dollar rose against the euro and yen on Monday after U.S. President Trump changed his rhetoric and eased tense trade relations. This week will see many Federal Reserve officials taking part in intensive events, and investors need to pay attention. This trading day will see Federal Reserve Chairman Powell speaking at an event hosted by the National Association of Business Economics, and investors need to pay close attention.
Analysis of major currency trends
U.S. dollar: As of press time, the U.S. dollar index is hovering around 99.35. Against the backdrop of the escalation of the U.S.-China trade war, the U.S. dollar is recovering, with Trump threatening to impose 100% additional tariffs on Chinese goods on November 1. The retaliatory measure xmspot.comes in response to China's increasing restrictions on rare earths and the imposition of port fees on U.S. ships. From a technical perspective, the initial resistance level for the U.S. Dollar Index (DXY) is found at 99.563. A break above this level could open an upward channel for the index towards the August 1 high of 100.257. On the downside, support is first seen at 98.714 (Fibonacci level), followed by 98.238 and the 50-day moving average at 98.011. Short-term momentum favors the bulls, but geopolitical risks and unwinding of carry trades could limit the index's upside in the short term.
1. The German president will visit the UK after 27 years
Buckingham Palace announced on October 13, local time, German President Frank-Walter Steinmeier will pay a state visit to the UK from December 3 to 5. This will be the first state visit to the UK by a German head of state in 27 years. Since Buckingham Palace is under renovation, King Charles III and Queen Camilla will receive the German delegation at Windsor Castle throughout the entire trip. The visit aims to strengthen the alliance between the two countries and deepen economic and trade cooperation. The itinerary includes political talks, business meetings, royal welcome ceremonies, state banquets, military parades and other traditional diplomatic etiquette.
2. The new French cabinet held its first working meeting and overcoming the political crisis became the top priority
On the 13th local time, members of the new French government cabinet held their first working meeting. French Prime Minister Le Corny said that the new government’s “most important task” is to “survive this political crisis.” French President Macron, who is visiting Egypt, also called on all parties to "work for stability" earlier in the day. French Prime Minister Le Corny announced the cabinet list of the new government on the 12th. On the morning of the 13th, the French far-right party "National Alliance" and the left-wing party "Intrepid France" submitted a motion of no confidence in the new government to the National Assembly.
3. Citigroup Australia CEO: The Reserve Bank of Australia may not cut interest rates again
The CEO of Citigroup Australia said that as private sector economic activity picks up and consumer confidence rebounds, the Reserve Bank of Australia's interest rate cutting cycle may be over. Australia and New Zealand CEO Mark Woodruff said: "We are quite optimistic about the Australian economy. Although our team still expects another interest rate cut, the interest rate cuts in this cycle may have been xmspot.completed."
4. On the 13th day of the U.S. government's "shutdown," the Treasury Secretary said it has begun to affect the national economy
The U.S. federal government's "shutdown" entered its 13th day. Finance Minister Bessant said that this round of "shutdown" has begun to affect the national economy. Bessant said on a Fox Business Channel program that day that “the situation is getting more and more serious” and that the government’s “shutdown” has begun to affect the real economy and people’s lives. He said that in order to ensure the payment of military pay, the federal government had to suspend the salary of other federal employees and service agency employees, including museums affiliated with the Smithsonian Institution and the National Zoo. Senate Republican leader Thune said that the 13th is a public holiday in the United States and the Senate will resume session on the 14th. It is expected to hold the eighth vote on the temporary appropriation bill that night.
5. United Nations Secretary-General: is stepping up efforts to expand humanitarian operations in Gaza
On October 13, local time, United Nations Secretary-General Guterres issued a statement through his spokesperson, welcoming the continued implementation of the ceasefire agreement in the Gaza Strip, including the release of Israeli and Palestinian detainees. Guterres expressed his appreciation for the continued efforts of the governments of Qatar, Egypt, the United States and Turkey to promote mediation, and thanked the International xmspot.committee of the Red Cross for its irreplaceable role in ensuring that the release operation is safe and humane. The statement pointed out that with the ceasefire agreement taking effect, the people of Gaza and IsraelAfter months of war, everyone finally saw the fragile and precious dawn of peace. The United Nations and its partners are stepping up efforts to expand humanitarian operations throughout Gaza, and United Nations agencies have entered previously cut-off areas to deliver relief supplies to local people. Guterres said that these actions are an important first step to stabilize the situation and restore basic human dignity, but the needs in Gaza remain huge, and continued access and financial support are crucial.
Institutional Views
1. Goldman Sachs raised its forecast for the USD/JPY exchange rate
Goldman Sachs raised its USD/JPY forecast and believed that "a certain premium may continue to exist in the market" in view of the risks associated with the stimulative policies promoted by Takaichi Sanae. Strategists including Kamakshaya Trivedi raised their forecasts for the U.S.-Japanese exchange rate in the next three months, six months, and 12 months to 150, 148, and 145 from the previous 142, 138, and 135.
2. Standard Chartered Bank: If the U.S. economic momentum continues, further interest rate cuts may be difficult to achieve in 2026
Standard Chartered Bank analysts Nicholas Chia and Steve Englander said in a report that although the Federal Reserve is expected to continue to cut interest rates in the rest of 2025, if the U.S. economic momentum remains strong, the possibility of further interest rate cuts in 2026 will decrease. Two analysts pointed out that in the medium to long term, this situation could push up the U.S. dollar and U.S. Treasury yields. "We believe that the market's expectation of an interest rate cut of about 63 basis points by the Federal Reserve in 2026 may be gradually eliminated, especially if the U.S. economic momentum continues and productivity growth exceeds expectations, which will push yields and the dollar further higher."
3. Netherlands International: The coexistence of tighter fiscal policy and looser monetary policy in the UK may weigh on the pound
In a report, ING analysts said that the actual performance of the British economy was not as weak as reported by local media, but the risks of tighter fiscal policy and looser monetary policy may put pressure on the pound. Analysts pointed out that the market currently underestimates the extent of future interest rate cuts by the Bank of England, although the next rate cut is not expected to occur until February next year at the earliest. Finance Minister Reeves will have to raise taxes or cut spending to reduce the fiscal deficit in the autumn budget in November. ING added that the appeal of both the pound and the euro was limited due to political uncertainty in France, but the fiscal and currency risks faced by the pound "may be higher."
The above content is all about "[XM Foreign Exchange Market xmspot.commentary]: The U.S. dollar index rebounded, Federal Reserve Chairman Powell, RBA meeting minutes and British employment data became the focus". It was carefully xmspot.compiled and edited by the XM foreign exchange editor. I hope it will be helpful to your trading! Thanks for the support!
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