Dollar Weakens as Markets Assess Fed Outlook

2026-10-15 02:38 By Jam Kaimo Samonte 1 min. read

The US dollar index slipped to around 102 on Thursday, retreating from 18-month highs as investors continued to evaluate the Federal Reserve’s monetary policy outlook following stronger-than-expected inflation data.

Figures released Wednesday showed that annual headline inflation accelerated to 3.7% in September, surpassing forecasts of 3.6%, while core inflation edged up to 2.6%, above expectations of 2.5%.

Chicago Fed's Austan Goolsbee described the figures as “discouraging” and cautioned that the rapid expansion of AI infrastructure could also be overheating the economy.

However, some policymakers continued to favor a cautious approach to further rate increases, with markets pricing in roughly a 73% probability that the Fed will keep interest rates unchanged this month.

Investors are now awaiting further remarks from Fed Chair Kevin Warsh ahead of the central bank’s media blackout, which begins on Saturday.

The dollar weakened the most against the euro, sterling and kiwi.



News Stream
DXY Extends Gains After Strong Jobs Report
The US dollar index rose 0.6% to 102.2 on Friday, extending gains after October employment data significantly exceeded expectations. Nonfarm payrolls increased by 165,000, more than double the 65,000 forecast, while the unemployment rate edged down to 4.1%. Job gains were broad-based, led by professional and business services and healthcare, reinforcing evidence of a resilient labour market supported by consumer spending and business investment. The stronger figures strengthened expectations that the Federal Reserve will maintain a restrictive monetary stance, with investors anticipating another interest rate increase in December to contain inflation. Policymakers will receive one more employment report and a full set of inflation data before their next meeting. The dollar also benefited from increased safe-haven demand amid a global equity selloff driven by concerns over AI valuations and tighter regulation.
2026-11-06
Dollar Index Rebounds
The dollar index rose to 102 on Friday, its highest level in a week, partially reversing losses from the previous two sessions as traders awaited the key US jobs report and assessed a global equity sell-off. Demand for safe-haven assets increased amid the equity rout and growing concerns over the AI trade and elevated capital expenditure, as investors weighed the prospect of a more restrictive regulatory environment under a Democratic-led Congress. Meanwhile, expectations that the jobs report would point to a stable labour market, while reinforcing the view that employment conditions were not a source of inflationary pressure, provided further support to the greenback. Markets are currently pricing in around a 71% probability of a 25bps Fed rate hike in December. The dollar posted its strongest gains against the euro, British pound and Japanese yen. Despite Friday's advance, however, the dollar remains down 0.3% for the week.
2026-11-06
Dollar Rises Ahead of Key Jobs Report
The US dollar Index climbed to around 101.8 on Friday, finding support as investors braced for the October jobs report that could provide further clues about labor market conditions and influence expectations for Federal Reserve monetary policy. Recent figures showed that private businesses added 86,000 jobs in October, according to ADP data, while initial jobless claims dropped to their lowest level in 57 years. Despite the stronger employment indicators, markets scaled back expectations of a December Fed rate hike to around 68%, down from nearly 83% the previous day. The shift in rate expectations followed a sweeping Democratic victory in the US midterm elections, which triggered a sharp stock market selloff amid concerns over tighter AI industry regulation and a possible slowdown in data center expansion. Meanwhile, investors anticipate that Democrats could push for an end to the Iran conflict, potentially lowering oil prices and easing inflationary pressures.
2026-11-06