The dollar plunged sharply today after Christopher Waller, a member of the Federal Reserve's Board of Governors and a permanent voter on the Federal Open Market Committee (FOMC), voiced support for the Fed to hold interest rates at this month's meeting. The dollar index fell 0.59% to 99.009, while the dollar weakened 0.31% to 1.162 against the euro and dropped 1.89% to 155.70 yen amid concerns about possible intervention by Japanese authorities. Investors have increased bets that the Fed will hold rates at its September 15-16 meeting. The latest CME Group FedWatch Tool shows investors now price a 51.6% chance of a hold, up from 36.8% yesterday, while the odds of a 25-basis-point hike have fallen to 48.4% from 63.2%. Waller said he would support holding rates if next week's inflation data does not come in higher than expected. He expressed confidence in the current inflation outlook and noted that recent trends show some signs of slowing inflation. Investors are now awaiting tomorrow's nonfarm payrolls report, with analysts expecting an increase of 58,000 jobs in August after a decline of 23,000 in July, and the unemployment rate expected to hold steady at 4.1%.
Fed likely to hold rates, keeping policy rate unchanged rather than hiking
Fed likely to hold rates, reducing upward pressure on yields
