28.10.202514:19:40UTC+00Dollar Little Changed, Fed Awaited

On Tuesday, the dollar index remained relatively stable around 98.8. This cautious stance was evident as traders refrained from committing to significant decisions before the Federal Open Market Committee meeting, with a general consensus that the Federal Reserve would announce a further 25-basis-point reduction in the federal funds rate on Wednesday. Additionally, investors were anticipating Thursday’s meeting between U.S. President Trump and Chinese President Xi, where discussions were expected to focus on a prospective trade deal. This follows reports of officials agreeing on an initial framework that includes issues related to rare earth minerals, soybean purchases, and the app TikTok. Meanwhile, the dollar experienced a notable decline against the yen subsequent to Treasury Secretary Scott Bessent's discussions with Japan's Finance Minister Satsuki Katayama about foreign exchange volatility. Bessent urged adherence to “sound monetary policy,” a remark interpreted as a critique of Japan's gradual approach to rate normalization. In contrast, the U.S. currency gained strength against the British pound, driven by increased speculation among traders regarding additional rate cuts by the Bank of England.