2025.10.0818:41:59UTC+00Dollar Hits Over Two-Month High

The dollar index continued its upward trajectory for the third straight session, surging past 98.9 on Wednesday, marking its highest level since early August. This strength was buoyed by the relative weakness of other major currencies. Most notably, the dollar appreciated against the yen, driven by expectations of substantial fiscal stimulus in Japan under the country’s new government leadership. Additionally, the dollar gained ground on the Swiss franc and the euro, the latter being influenced by ongoing political instability in France. In the latest minutes released from the Federal Open Market Committee meeting, officials highlighted increasing downside risks to employment, despite ongoing concerns over inflation. Approximately half of the policymakers anticipate two more interest rate reductions by the close of 2025. The markets have now fully priced in a 25-basis-point rate cut later this month, with the likelihood of another reduction in December estimated at about 78%. Concurrently, the government shutdown has stretched into its second week.