Currency Movements Amid Global Economic Twists

The dollar steadied on Wednesday after a recent surge, easing pressure on major currencies. The New Zealand dollar plummeted after a rate cut by the RBNZ. Meanwhile, robust U.S. job data tempered expectations for future Fed rate cuts. Investors focus on inflation data and China’s fiscal policy developments.

The dollar held steady on Wednesday, providing relief to major currencies following last week's rally to a seven-week high. Key focus remains on the U.S. interest rate outlook. The New Zealand dollar dropped sharply after the RBNZ cut interest rates by 50 basis points, signaling potential for further monetary easing.

The week's sparse U.S. data offered a breather post a strong jobs report that had spurred the dollar's rise. Minutes from the Federal Reserve's September meeting, revealing discussions on a perceived weak labor market, are anticipated. Market predictions now show an 85% chance of a quarter-point Fed rate cut.

Thursday's U.S. Consumer Price Index report is critical, alongside corporate earnings, to sustain the dollar's rebound. Meanwhile, election uncertainties in the U.S. and Japan, alongside changes in Japan's monetary stance, keep investors cautious. Attention also pivots to China's fiscal strategy impacting global markets.

(With inputs from agencies.)