Forex analytics. Dollar will hold a performance rehearsal – ForexNews.PRO
Forex believes words and turns a blind eye to the obvious. Another batch of data confirming the weakness of the US labor market did not move the needle of derivatives readings. The average employment in the private sector from ADP decreased by 2,500 in the four weeks to November 1, and applications for unemployment benefits increased to 232,000 in the week to October 18. Fixed-term contracts continue to provide a less than 50% probability of a federal funds rate cut in December, which supports the “bears” on the EURUSD.
A curious pattern is observed in the readings for January. Derivatives estimate the chances of a cut in the cost of borrowing by 25 bps or more at 68%, and by 50 bps at 18%. It seems that the futures market is convinced that the lack of data will force the Fed to postpone the timing of monetary expansion from the end of 2025 to the beginning of 2026. This approach gives grounds to expect a strengthening of the US dollar in the short term, followed by a weakening over the medium-term investment horizon.
About 30% of investors surveyed by Bank of America believe that EURUSD will trade in the range of 1.2-1.3 in 2026, 48% vote for maintaining the current corridor of 1.1-1.2. 2% are confident that the euro will fall below parity with the US dollar or rise above $1.3. Interestingly, the respondents give the Japanese yen the greatest potential for growth.
Thus, investors prefer one of two scenarios: either the EURUSD restores the uptrend, or it continues to consolidate. Commerzbank is ready to give its teeth for the first option. He believes that in 2026, the Fed risks falling under the umbrella of the White House. The central bank will succumb to Donald Trump’s pressure to lower rates. Bloomberg claims that this development will accelerate economic growth in 2026, but in 2027 the United States will face stagflation and recession.
The shutdown and trips to Asia and the Middle East distracted the US president. However, Donald Trump is gradually returning to pressure on the Fed. According to the owner of the White House, he has almost chosen a new head of the central bank. I’m afraid this is just the beginning. Berries. The markets will see the flowers later.
Their attention is now focused on the minutes of the October FOMC meeting. Judging by Jerome Powell’s press conference, he’s going to be hawkish. As a result, the greenback is growing on rumors. I don’t want him to fall for the facts.
