The dollar index held steady around 102.5 on Monday, following a half percent surge in the previous session. This increase was triggered by a stronger-than-expected U.S. jobs rort, which led markets to dismiss the possibility of another 50 basis point rate cut from the Federal Reserve in November. Data released on Friday revealed that nonfarm payrolls rose by 254,000 in Stember, significantly exceeding the anticipated 140,000 jobs, while the unemployment rate declined to 4.1% from 4.2%.
Market expectations now indicate a 95% probability of a more modest 25 basis points rate cut in November, with roughly a 5% chance of no change in the policy rate, according to CME’s FedWatch Tool. Investors are now turning their attention to the upcoming Fed meeting minutes on Wednesday and the consumer price index rort on Thursday to further clarify the rates outlook. Additionally, the dollar has seen increased safe-haven inflows due to escalating tensions in the Middle East.
On October 7, the DXY rose by 0.0212 or 0.02% to 102.5062, up from 102.4850 in the prior trading session. Analysts forecast that the United States Dollar will likely trade at 101.99 by the end of the current quarter. Looking ahead, projections suggest a trading level of 104.85 in 12 months' time.