Dollar Surge Shakes Up Global Currencies Amid Rate Cut Speculation

The U.S. dollar has reached a two-month high against major currencies, driven by expectations of Federal Reserve rate cuts. Recent economic data and market disruptions are influencing currency trends, with the yen nearing 150 per dollar. The euro and other currencies remain steady amid ongoing central bank strategies.

The U.S. dollar surged to a two-month high against major currencies on Tuesday, fueled by expectations of upcoming Federal Reserve rate cuts. Meanwhile, the yen moved closer to the pivotal 150 yen per dollar mark.

Stability characterized the euro during early Asian trading hours, with its value near the lowest since August 8, anticipating the European Central Bank's forthcoming policy meeting. Recent U.S. economic data indicate resilience with modest slowing, influencing traders to predict smaller Federal Reserve rate adjustments.

At its last policy meeting, the U.S. Federal Reserve initiated its easing cycle with an aggressive 50-basis-point cut. Current market sentiment suggests an 89% probability of a 25 basis point reduction in November, with a total of 45 basis points expected by year's end. Amid these developments, the dollar index saw significant gains, poised to break a three-month downturn.

(With inputs from agencies.)