The US dollar rose during Asian trading on Thursday, recording its highest level in 11 weeks, as markets prepare for an interest rate cut by the Federal Reserve at the next policy meeting, but less sharply than previous expectations, and markets are pricing a possible victory for former President Donald Trump in the presidential election next November.
Trump's plan of tax cuts, easing financial restrictions, and increasing tariffs is seen as positive for the dollar, and higher tariffs may have negative effects on growth in Asian and European Exporting Countries, which may force their central banks to lower interest rates more than the Fed and thus the dollar's value rises against these currencies.
Investors focus has shifted to the highly anticipated rally, along with the Fed's interest rate path.
EURUSD
The EURUSD pair fell to an 11-week low ahead of the ECB meeting expected today, as expectations indicate that the European Central Bank will cut interest rates today by 25 basis points, and the ECB governor Christine Lagarde also refrained from giving much evidence about interest rate expectations, the market impact may be muted.
GBPUSD
The British pound fell against the US dollar to its lowest level in two months after weaker-than-expected British inflation data provided scope for the Bank of England to cut interest rates more aggressively, as the annual inflation data represented by consumer prices fell to 1.7% in September, the lowest reading since 2021, as the declines indicated a decline from 2.2% to only 1.9%.
This has strengthened bets on an interest rate cut by the Bank of England next month and made further cuts in December more likely.
USDJPY
The dollar against the yen is still trading near the highs recorded at the beginning of last August and very close to the level of 150.00.
BOJ board member Seiji Adachi said on Wednesday that the central bank should raise interest rates at a very moderate pace and avoid raising them prematurely due to uncertainty about the global outlook and domestic wage developments.
AUDUSD
The Australian dollar pair is still declining, but it rose on Thursday during the Asian trading period, especially after the positive data issued by Australia at dawn today, where the rate of change in employment rose to more than 64 thousand jobs while expectations were only 25 thousand jobs, and the unemployment rate in September fell to 4.1%.
NZDUSD
The New Zealand dollar pair is still trading on a decline as doubts about the stimulus from the main trading partner, China, widen, and New Zealand's economic activity is declining, which may make us have a further cut to the New Zealand interest rate after the last cut, which was by 50 basis points.
