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Hello everyone, today XM Forex will bring you "[XM Forex Decision Analysis]: The probability of the Federal Reserve cutting interest rates soars, and the U.S. dollar index stabilizes above the 100 mark." Hope this helps you! The original content is as follows:
In early trading in Asia on November 25, spot gold was trading around US$4,150 per ounce. The price of gold rose nearly 1.7% on Monday, mainly due to the increasing market expectations that the Federal Reserve will cut interest rates in December. ; U.S. crude oil traded around $58.92 per barrel, with market expectations that the Federal Reserve may cut interest rates in December boosted risk assets, while investors were cautious about Russia's ability to successfully reach a peace agreement in Ukraine that would boost its oil exports, limiting the decline in oil prices.
Global foreign exchange markets showed divergent trends on Monday, with the U.S. dollar index falling slightly by 0.1% to 100.15, mainly affected by the continuous dovish signals released by Federal Reserve officials. At the same time, the U.S. dollar bucked the trend and rose 0.2% against the yen to 156.755 yen. The market remained highly vigilant about possible intervention by the Japanese authorities in the foreign exchange market.
Federal Reserve Governor Waller made it clear on Monday that current job market data supports another 25 basis points interest rate cut at the December policy meeting. This view echoes www.xmxmxm.cnments made by New York Fed President Williams on Friday, who believed the Fed could still cut interest rates in the "near term" without jeopardizing its inflation target. Affected by this, according to the CME Group's FedWatch tool, the market's expected probability of an interest rate cut in December has risen sharply from 30% to 85%.
Despite the overall weakness in the U.S. dollar, the Japanese yen remains under downward pressure. Traders generally believe that the Japanese Ministry of Finance may intervene in the 158 to 162 yen range, and this week's light trading due to the US Thanksgiving Day may provide a suitable window for intervention. Japanese government adviser Takuji Aida on SundayIt has been publicly stated that Japan has sufficient foreign exchange reserves that can be used to mitigate the negative impact of the depreciation of the yen.
The euro rose slightly against the dollar by 0.1% to $1.1526, while the pound rose slightly to $1.3108 ahead of the UK budget announcement on Wednesday. The market is paying close attention to the upcoming U.S. retail sales and producer price data, which may provide new direction guidance for exchange rate trends.
As the debate within the Federal Reserve over "retrospective data" and "forward-looking factors" continues, currency market volatility is expected to further intensify, and investors need to be wary of possible surprises during the holidays.
SNB Chairman Martin Schlegel said over the weekend that the central bank is still willing to reintroduce negative interest rates if medium-term price stability is threatened. However, he stressed that "the standards are very high."
Schlegel also talked about the recent deal to reduce U.S. tariffs on Swiss goods from 39% to 15%, calling it helpful but far from a "game changer." These tariffs affect only about 4% of Swiss exports.
U.S. trade policy remains the biggest uncertainty for Swiss www.xmxmxm.cnpanies, he said, noting that exporters may suspend shipments to the United States until lower tariff rates are fully implemented.
Boston Fed President Susan Collins made clear her bias toward caution ahead of the December 9-10 Federal Open Market www.xmxmxm.cnmittee meeting, saying she believed there were "reasons to be hesitant about lowering borrowing costs again." After implementing 50 basis points of easing in September and October, Collins argued on Saturday that policy was now "somewhat restrictive" and had been adjusted appropriately for current conditions.
Collins emphasized that the Fed faces a difficult balance: inflation remains above target while the job market shows clear signs of slowing. Risks "exist on both sides of the mission," she said, stressing that growing weakness in employment could change her stance. "If I see more signs of weakness and weakness, I will take it seriously," she said.
She also highlighted the unusually broad range of views that emerged within the www.xmxmxm.cnmittee. "We are in a www.xmxmxm.cnplex period of policymaking," Collins said, adding that diversity of views is healthy at a time when the economic outlook is highly uncertain.
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