Central Bank Weekly: Despite USD Price Swings, Fed Expectations Have Remained Stable

Talking Points:

The US Dollar is having an atypical month of October, usually one of its best months of the year. The recent move lower by the DXY Index could be the greenback recoupling with Fed rate expectations.

– A 25-bps hike is being priced-in for December 2018, but then no rate move is anticipated until at least June 2019.

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The US Dollar finds itself struggling in the second half of October. The turn lower over the past week may be seen as a surprise to some, given the historical performance of the greenback at the start of the fourth quarter. Over the past 10-years, October has been the third best month of the year for the DXY Index, gaining on average +0.89%. Yet in October 2018, the DXY Index is only up by +0.1%, having erased -1.18% from its high set just earlier this week.

The lack of US Dollar upside is surprising for several reasons, perhaps most notably because of what has happened with

Article source: https://www.dailyfx.com/forex/fundamental/article/weekly_spotlight/2018/10/11/Central-Bank-Weekly-Despite-USD-Price-Swings-Fed-Expectations-Have-Remained-Stable.html