Dollar Underperforms Today


The U.S. dollar could only close slightly higher yesterday despite several bullish economic reports.

In recent weeks there has been only a limited flight-to-quality flow of funds into the greenback, which is a sign of longer-term weakness.

Japan’s finance minister said he is watching foreign exchange markets with a sense of urgency and indicated he is ready to take measures to support the Japanese yen.

The Tokyo core consumer price index, which is considered to be a leading indicator of nationwide trends, increased 2.7% in October from a year earlier, which exceeded market forecasts of a 2.5% gain.

One hundred dollar bill closeup


Stock index futures are higher.

Personal income in September increased 0.3% when up 0.4% was expected, and personal consumption expenditures advanced 0.7% when a gain of 0.5% was anticipated. The PCE price index increased 0.4% when a gain of 0.3% was estimated.

The 9:00 central time October consumer sentiment index is predicted to be 63.0.

Gains are likely to be limited by the uncertainties of the situation in the Mideast.


Futures are steady to a little higher at the front of the yield curve and are lower mid-curve and at the long end of the yield curve.

Michael Barr of the Federal Reserve will speak at 8:00.

Financial futures markets are now predicting there is a 97% probability that the Federal Open Market Committee will keep its fed funds rate unchanged at its November 1 policy meeting, and there is a 3% probability of a 25 basis point reduction, which is a reflection of increasing geopolitical risks.


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