Dollar cedes some ground as investors turn their attention to when the US central bank may start easing its monetary policy stance
An employee passes share price information displayed on an electronic ticker board inside the London Stock Exchange Group Plc's offices in London, UK. File photo: BLOOMBERG/LUKE MACGREGOR
The key question for markets is whether the Fed will also signal it could slow further rate hikes, in a so-called dovish pivot. With a 75 bps increase in the Fed’s key rate on Wednesday to a range of 3.75%-to 4% priced in, traders are split on the size of a December move while futures market are pricing in a roughly a 40% chance of another 75 bps increase.
“We suspect [Fed] chair [Jerome] Powell will try very hard to avoid saying anything that might be misconstrued as a signal that the inevitable step down in the size of tightening is a pivot towards the end of the tightening cycle,” said Kevin Cummins, chief US economist at NatWest Markets.
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