CFD Trading Rate US Dollar vs Japanese Yen (USDJPY)

USD/JPY fell, in line with our call to sell rallies. Pair was last seen at 151.99, OCBC’s FX analysts Frances Cheung and Christopher Wong notes.

Elections outcome may have implication on USD/JPY

“Bullish momentum on daily chart intact while RSI is in overbought conditions. Bias to sell rallies Support at 150.70/80 levels (50% fibo retracement of Jul high to Sep low, 100 DMA), 148.10/30 levels (21 DMA, 38.2% fibo). Resistance at 153.30 (61.8% fibo retracement of Jul high to Sep low).”

“This morning, Tokyo CPI came in softer at 1.8% y/y (vs. 2.2% prior), somewhat reinforcing BoJ’s rhetoric of not rushing to normalise policy. Our house view does not look for BoJ to hike at upcoming MPC (31 October) though we are still of the view that BoJ is likely to tighten in Dec-2024, amid higher services inflation and wage pressures in Japan. But before that, the key event risk is Japan elections on Sunday (27 October).”

“Poll by Asahi newspaper showed that the LDP will likely lose majority in coalition with Komeito party while Kyodo news poll saw LDP constitutional democratic party spread narrowed. An LDP victory is likely to see policy continuity and should lead to USD/JPY trading lower. However, in the event LDP fails to win mandate, USD/JPY may risk rising further in the near term over monetary policy uncertainty that may be associated with the incoming administration.”

• USD/JPY falls due to mild correction in the US Dollar.
• US flash S&P Global PMI for October came in better than projected.
• Investors doubt whether the BoJ will hike interest rates again in the remainder of the year.

The USD/JPY pair falls to near 152.00 in Thursday’s North American session after refreshing a 12-week high near 153.20 on Wednesday. A mild correction in the asset is purely driven by a temporary pause in the US Dollar’s (USD) rally for a while.

The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, corrects to near 104.20 after revisiting the August high of 104.50.

The Greenback remains near its intraday low, although the flash S&P Global PMI data for October has come in better than expected. The report showed that activities in the service sector expanded at a surprisingly faster-than-expected pace to 55.3. Economists expected the Services PMI to have grown at a slower pace to 55.0 from 55.2 in September. Meanwhile, the Manufacturing PMI contracted for the fourth straight month but at a slower-than-expected pace to 47.8.

Meanwhile, the outlook of the US Dollar remains firm as the Federal Reserve (Fed) is expected to pursue the interest rate cut path at a moderate pace. Also, growing uncertainty over the United States (US) presidential elections has improved the US Dollar’s appeal as a safe haven.

In the Tokyo region, investors doubt whether the Bank of Japan (BoJ) will hike interest rates again after slightly dovish guidance from Governor Kazuo Ueda. "When there's huge uncertainty, you usually want to proceed cautiously and gradually," Ueda said on Wednesday, Reuters reported. The comments from Ueda also indicated that the BoJ need to more time to gain confidence about inflation sustainably achieving 2% target.

Upward momentum remains strong; the next level to monitor is 153.40, followed by 154.00, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.  

Next level to monitor is 153.40

24-HOUR VIEW: “When USD was trading at 151.05 yesterday, we highlighted that ‘provided that 150.50 is not breached, USD is likely to rise to 151.50.’ We indicated that ‘the major resistance at 151.90 is not expected to come into view.’ However, USD broke above 151.50 and 151.90, as it surged to a high of 153.18. USD pulled back from the high to close at 152.75 (+1.12%). The pullback in severely overbought conditions suggests USD is unlikely to rise much further. Today, it is more likely to trade in a range between 152.00 and 153.20.”

1-3 WEEKS VIEW: “Two days ago (22 Oct), when USD was at 150.90, we indicated that ‘there has been a clear increase in momentum.’ We also indicated that ‘if USD breaks above 151.00, the focus will then shift to 151.90.’ After USD broke above 151.00, we stated yesterday (23 Oct, spot at 151.05) that ‘The focus now is at 151.90.’ Our view of a stronger USD was correct, but we did expect it to jump above 151.90 (high has been 153.18). Not surprisingly, momentum remains strong. From here, the next level to monitor is 153.40, followed by 154.00. Overall, only a breach of 151.00 (‘strong support’ level was at 150.00 yesterday) would mean that the advance that started early this month has come to an end.”

• USD/JPY turns bullish after clearing the Ichimoku Cloud and 200-day SMA, with momentum suggesting further upside towards the 160.00 target.
• Key resistance levels include the October 23 high of 153.19, followed by 154.00 and the July 30 peak at 155.21.
• A bearish scenario would require a break below the 200-day SMA at 151.38, with further support at 150.79 inside the Kumo.

The USD/JPY extended its gains sharply during Wednesday in the North American session, sponsored by the close positive correlation with the US 10-year T-note yield, while traders remain concerned about US elections. At the time of writing, the pair exchanges hands at 152.60, up by more than 1%.

USD/JPY Price Forecast: Technical outlook

The USD/JPY rose above the Ichimoku Cloud (Kumo) and the 200-day Simple Moving Average (SMA), turning bullish for the first time since early August 2024.

Momentum clearly indicates that buyers are in charge, and targeting the 160.00 figure, once they cleared key technical levels. In addition, the Relative Strength Index (RSI) cleared the latest peak, meaning that further USD/JPY upside is seen.

The USD/JPY first resistance would be the 153.19 October 23 daily high, followed by the 154.00 mark. On further strength, the USD/JPY could challenge the July 30 peak at 155.21, before etending its gains to July 19 peak at 157.86.

For a bearish scenario, sellers must clear the 200-day SMA at 151.38, before pushing the exchange rate below the Tenkan-Sen at 150.79, and inside the Kumo at 150.70.

USD/JPY Price Chart – Daily

USD/JPY is rising as pre-election concerns the ruling LDP party could lose weakens the Yen. 

• A change in leadership could influence the BoJ’s policy trajectory, keep interest rates low, and weigh on JPY. 
• The US Dollar benefits from an improved economic outlook and less aggressive monetary easing projections.  

USD/JPY is trading over 1.2% higher on Wednesday as it exchanges hands in the 152.90s, an over ten-week high for the pair. USD/JPY is slightly off its highs of the day after the US Dollar (USD) edged lower following the release of US Mortgage Applications which sank by 6.7% in the third week of October. It was the metric’s fourth consecutive contraction and extended the 17% plunge registered in the previous week (ending October 11). 

More broadly, a combination of political instability in Japan and shifting economic forecasts, coupled with a revision of expectations about the future path of interest rates in the United States (US) is propelling the pair higher.

The Japanese Yen (JPY) has been experiencing considerable selling pressure due to domestic political uncertainty. Recent polls suggest that the ruling Liberal Democratic Party (LDP) may lose its majority in the upcoming general election. A potential leadership shift or the need for a coalition could complicate the government's policy-making, including the Bank of Japan’s (BoJ) approach to policy making – a major factor impacting the Yen. 

The International Monetary Fund's (IMF) downgrade of Japan's economic growth forecast to 0.3% for this year, down from a previous 0.7%, further exacerbates this pressure. A weaker economic outlook generally reduces demand for a currency, contributing to a decline in its value. 

In the near term the weak growth reflected in these revisions are contributing to downward momentum for the Yen, which can lead to an increase in the USD/JPY exchange rate.

In addition, recent Japanese inflation data has fallen below the BoJ’s forecast projections suggesting the bank may not be able to increase interest rates from their relatively low 0.25% level. Lower interest rates are negative for a currency as they can cause capital outflows. 

On the other hand, the US Dollar (USD) is enjoying a period of upside against the Yen, supported by a change in the outlook for monetary policy by the US Federal Reserve (Fed). Although the Fed decided to slash interest rates by 50 basis points (bps) (0.50%) at its September policy meeting due to concerns regarding the weakening of the US labor market, data since has calmed investor fears about employment in the US. 

As a result the Fed is now not expected to follow up with another double-dose rate cut in October, as had previously been suspected. This diluting down of the forecast trajectory for interest rates in the US has supported a rebound in the US Dollar, and a rise in USD/JPY. The less drastic fall in interest rates is supportive for the USD because it increases foreign capital inflows.

To summarize, the mixture of political uncertainty, weak projected growth and permanently low interest rates in Japan, versus the more buoyant economic outlook in the US and less dovish monetary policy stance of the Federal Reserve is leading to gains for USD/JPY that could very well extend. 

For now, the most interesting G10 pair remains USD/JPY, ING’s FX Francesco Pesole notes.

The 155.00 level becomes a tangible risk before the US election

“After clearing the 151.3 200-day moving average level, there is no clear technical resistance level into 155.0. The Japanese Yen (JPY) slump is both a function of higher USD yields and domestic political risk premium ahead of next weekend’s election.”

“The lack of verbal intervention by Japanese authorities so far has probably built speculative sellers' confidence, but we still think any threat of fresh FX intervention can lead to a material USD/JPY correction given the success of the latest Bank of Japan operations.”

“If the Minister of Finance stays quiet on the yen, 155.0 becomes a very tangible risk before the US election.”

USD/JPY had rebounded above 151, with the JPY being highly sensitive to the sharp rise in US yields, DBS’ FX & Credit Strategist Chang Wei Liang notes.

High risks of MOF intervention

“There is a risk that excessive JPY weakness will lead the BOJ to consider bringing forward its next rate hike, although this will likely await the outcome of Japanese elections on 27 Oct, with PM Ishiba having promised a supplementary budget post elections.”

“The IMF estimates Japan’s nominal neutral rate at about 1.50% and expects the BOJ to gradually raise rates. USD/JPY short-term volatility is high, but there is scope for a retracement below 150 if BOJ is to sharpen its rate guidance, as it had previously noted the stronger impact of exchange rates on inflation.”

“Furthermore, excessive JPY volatility, with USD/JPY having risen by over 10 big figures from 140 in September, heighten risks of MOF intervention. Being short USD/JPY at around 152.50 may offer a good risk-reward.”

• USD/JPY flirts with the 151.00 level, driven by rising US Treasury yields but held back by key resistance at the top of the Ichimoku Cloud.
• Momentum remains bullish, with the RSI hitting a new high, suggesting further upside towards the 200-DMA at 151.36 and beyond.
• A break below 151.00 could see support at 149.68, with further downside risks targeting the October low at 149.09.

The US Dollar prints back-to-back gains against the Japanese Yen on Tuesday but struggles to clear the 151.00 figure decisively. At the time of writing, the USD/JPY trades at 150.92, as the US 10-year T-note yield keeps the pair contained at around current exchange rates.

USD/JPY Price Forecast: Technical outlook

The USD/JPY is testing key resistance at the top of the Ichimoku Cloud (Kumo) at around 150.80/95, with buyers eyeing the 200-day moving average (DMA) at 151.36.

From a momentum standpoint, buyers are in charge. The Relative Strength Index (RSI) is reaching a new higher high, signaling bulls are gathering steam.

A daily close above the 151.00 figure could sponsor a test of the 200-DMA at 151.36. On further strength, the pair could test the July 25 swing low turned resistance at 151.93 before cracking 152.00.

Conversely, if USD/JPY dives beneath 151.00, the first key support would be the Tenkan-Sen at 149.68, ahead of the October 21 low of 149.09.

USD/JPY Price Chart – Daily

The US Dollar (USD) could break above the major resistance at 151.00, but it might not be able to maintain a foothold above this level. In the longer run, there has been a clear increase in momentum; if USD breaks above 151.00, the focus will shift to 152.00, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

The focus may shift to 152.00 above 151.00

24-HOUR VIEW: “We expected USD to trade in a sideways range of 149.00/150.00 yesterday. USD then dropped to 149.07 before staging a surprising sharp rally, reaching a high of 150.88 in NY trade. The sharp and swift increase in momentum is likely to lead to further USD strength. A break above the major resistance at 151.00 will not be surprising, but overbought conditions suggest USD might not be able to maintain a foothold above this level. The next resistance at 151.50 is unlikely to come under threat. Support levels are at 150.30 and 150.00.”

1-3 WEEKS VIEW: “We have maintained a positive USD stance since early this month. In our most recent narrative from last Friday (18 Oct, spot at 150.00), we highlighted that ‘while USD rose to 150.32, upward momentum has only improved slightly, and it remains to be seen if USD could rise to 151.00.’ We added, ‘a clear break below 149.00 would indicate that the USD strength has ended.’ Yesterday, USD dropped close to 149.00, reaching a low of 149.07. However, it took off from the low and soared to 150.88. This time around, there has been a clear increase in momentum, and if USD breaks above 151.00, the focus will then shift to 151.90. On the downside, the ‘strong support’ level has moved higher to 149.45 from 149.00.”

• USD/JPY climbs to 150.52, its highest level in 12 weeks, as rising US bond yields fuel demand for the Dollar.
• Technical outlook remains bullish, with potential for further gains if the pair breaks through 150.78 and heads toward the 200-DMA at 151.34.
• A close below 150.00 could trigger a pullback, with key support levels at 149.27 and the 50-DMA at 145.55.

The USD/JPY climbed in the mid-North American session on Monday, up by 0.62%. The pair printed a 12-week peak of 150.52, as US Treasury bond yields rose as traders trimmed odds that the Federal Reserve would embark on an aggressive easing cycle. At the time of writing, the pair fluctuates at around 150.50

USD/JPY Price Forecast: Technical outlook

The USD/JPY began the week on the front foot and extended its gains past 150.00. Momentum remains bullish as depicted by the Relative Strength Index (RSI), which is at the brisk of clearing the latest higher peak.

If USD/JPY clears the 100-day moving average (DMA) confluence and the top of the Ichimoku Cloud (Kumo) at 150.78, this could sponsor a leg-up towards the 200-DMA at 151.34. If cleared, buyers would eye 152.00.

Conversely, a daily close below 150.00 would pave the way for a pullback, exposing the Tenkan-Sen at 149.27. Once surpassed, key support levels would be exposed, like 149.00, followed by the Senkou Span at 147.16, before testing the 50-DMA at 145.55.

USD/JPY Price Action – Daily Chart

• USD/JPY broke out of its Wedge pattern but failed to fall far and has recovered. 
• Underlying weakness shows up in the RSI’s divergence with price and could be a precursor to more weakness. 

USD/JPY broke down and out of its Rising Wedge pattern on Friday but has since recovered and returned back inside. 

The trend is at a delicate point and it is ambiguous. It is possible that the uptrend could be resuming and pushing price back up in a “last hurrah”. 

USD/JPY 4-hour Chart 

Alternatively, the bearish divergence between the Relative Strength Index (RSI) momentum indicator and price (red dotted lines) when comparing the October 16 and 21 lows is indicative of underlying bearish pressure, which, in turn, could suggest the pair could roll over and begin weakening again. 

A break below the 149.09 low formed after the breakout would provide confirmation of more weakness and a change in the short-term trend. This would probably lead to a target at 148.40 as a minimum, which is the 61.8% Fibonacci extrapolation of the height of the wedge lower. 

More downside could lead to support at 148.27 (October 10 low) or 147.23 (September 2 high). 

The US Dollar (USD) is likely to trade in a sideways range of 149.00/150.00. In the longer run, momentum has improved slightly; it remains to be seen if USD could rise to 151.00, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

USD can rise to 151.00

24-HOUR VIEW: “After USD soared to a 2-1/2-month high of 150.32 last Thursday, we highlighted on Friday that ‘the advance appears to be running ahead of itself, and USD is unlikely to rise much further.’ We held the view that USD ‘is more likely to trade in a 149.40/150.35 range.’ USD then traded sideways between 149.35 and 150.28, closing at 149.52 (-0.45%). Further sideways trading appears likely today, expected to be in a range of 149.00/150.00.”

1-3 WEEKS VIEW: “Our update from last Friday (18 Oct, spot at 150.00) still stands. As highlighted, while USD rose to 150.32, upward momentum has only improved slightly, and it remains to be seen if USD could rise to 151.00. On the downside, a clear break below 149.00 would indicate that the USD strength from early this month has ended.”

USD/JPY eased lower, tracking the dip in UST yields last Fri while markets continue to watch BoJ rhetoric. USD/JPY was last at 150.02, OCBC’s FX analyst Frances Cheung and Christopher Wong note.

Bias for pullback play

“Last Friday, Governor Ueda said that the outlook for overseas economies including the US is uncertain and financial markets continue to be unstable. He also said that the FX rate is now more likely to impact prices than in the past.”

“Earlier, FX chief Mimura flagged ‘sudden, one-sided move’ in FX. He also said ‘We’ll keep monitoring the forex market with a high sense of urgency, including any speculative moves.”

“Bullish momentum on daily chart shows signs of fading while RSI shows signs of easing from near overbought conditions. Bias for pullback play. Support seen at 148, 147 (21 DMA). Resistance at 150.70/80 levels (50% fibo retracement of Jul high to Sep low, 100 DMA).”

• USD/JPY retreats from a two-month high of 150.32, pressured by a decline in US Treasury yields.
• The pair faces key resistance at the 100-DMA and top of the Ichimoku Cloud around 150.84/151.50 before turning bullish.
• Further declines could see USD/JPY testing support at 148.84, with a potential drop to 147.35 if sellers gain momentum.

The USD/JPY retreats after hitting a two-month high of 150.32, edges down over 0.45%, and trades at 149.55 at the time of writing. Broad US Dollar weakness and the US 10-year T-note yield drop capped the pair’s advance to challenge higher prices.

USD/JPY Price Forecast: Technical outlook

The USD/JPY consolidated after hitting a new monthly high above 150.00, a level last seen since July 2024, yet it retreated somewhat to the 149.50 area, as it continued to climb steadily during the last eight days.

As the pair approaches the top of the Ichimoku Cloud (Kumo) and the 100-day moving average (DMA) at 150.84, buyers would have a complex scenario to break the 150.85/151.50 area. If surpassed, the USD/JPY would shift bullish, and it could be headed to test the July 30 high at 155.21, the latest swing high before the pair plummeted toward 141.69 on a five-day span.

Conversely, if USD/JPY extends its losses past the Tenkan-Sen at 148.84, sellers could move in and drive the price toward the October 8 low of 147.35 before testing the Senkou Span A at 146.87.

USD/JPY Price Action – Daily Chart

• USD/JPY forms an ominous-looking bearish Rising Wedge pattern. 
• The price pattern warns of potentially more weakness to come.  

USD/JPY keeps rising and forming a Rising Wedge pattern as it closes in on an old major trendline. The wedge is a bearish pattern and suggests the pair is at risk of breaking lower. 

The formation of the pattern radically changes the outlook for the pair. Whilst previously USD/JPY was in a short-term uptrend, it is now more likely to decline if certain conditions are met.

USD/JPY 4-hour Chart 

Momentum, measured by the Moving Average Convergence Divergence (MACD) indicator, has steadily fallen during the formation of the Rising Wedge at the same time as price has risen. This divergence is a bearish sign and adds the picture of downside risk for the pair.

A decisive break below the lower trendline of the wedge would confirm a breakdown. This move would be expected to fall to 148.40 as a minimum, the 61.8% Fibonacci extrapolation of the height of the wedge at its tallest part. More downside could lead to support laying at 148.27 (October 10 low) or 147.23 (September 2 high). 

A decisive break would be one characterized by a longer-than-average red candlestick that cleared the lower line of the wedge and closed near its low or three red candles in a row breaking below the bottom of the wedge. 

• USD/JPY encounters offers near 150.00 as the US Dollar struggles to extend its upside further.
• Traders priced out the Fed's larger-than-usual size of 50 bps interest rate cut in November.
• Japan’s National core CPI accelerated to 2.1% in September.

The USD/JPY pair faces selling pressure near the psychological resistance of 150.00 in Friday’s North American session. The asset drops as the three-week rally in the US Dollar (USD) appears to have halted, however, its outlook remains upbeat. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, declines from the 10-week high of 103.90 to near 103.50.

Market sentiment appears to be cheerful as Democratic Kamala Harris leads national polls against Republican Donald Trump by a slight margin. S&P 500 futures have posted significant gains in the early New York session. 10-year US Treasury yields slump to near 4.086%.

The outlook of the US Dollar remains firm as investors expect the Federal Reserve (Fed) to follow a moderate interest rate cut path. Traders have priced out Fed large rate cut bets for November as a slew of upbeat United States (US) data has pointed to economic resilience.

According to the CME FedWatch tool, 30-day Federal Funds futures pricing data shows that there will be a 50 basis points (bps) decline in interest rates in the remaining year, suggesting that the Fed will cut its borrowing rates by 25 bps in November and December.

On the Tokyo front, Japan’s National core Consumer Price Index (CPI) – which excludes volatile food and energy prices – rose by 2.1% in September, faster than 2% in August. Higher inflationary pressures have kept the Bank of Japan (BoJ) on track to hike interest rates further this year.

USD/JPY is struggling to sustain a break above 150.00 as jawboning on the yen resumed, BBH FX analysts note.

USD/JPY tries to sustain a break above 150.00

“Japan’s chief currency official Atsushi Mimura warned at the moment we’re seeing slightly one-sided, sudden moves in the currency market. We’ll keep monitoring the forex market with a high sense of urgency, including any speculative moves.”

“Japan September CPI print was mixed but still argues for a cautious BOJ tightening cycle which can further undermine JPY. Headline CPI inflation matched consensus and slowed to 2.5% y/y vs. 3.0% in August due to subsidies to slash electricity and gas bills. Core (ex-fresh food) fell less than expected to 2.4% y/y (consensus: 2.3%) vs. 2.8% in August but is tracking the BOJ 2024 forecast of 2.5%.”

“Core (ex-fresh food & energy) unexpectedly increased one tick to 2.1% y/y (consensus: 2.0%) and remains slightly above the BOJ 2024 forecast of 1.9%.”

The US Dollar (USD) is likely to trade in a 149.40/150.35 range. In the longer, momentum has improved slightly; it remains to be seen if USD could rise to 151.00, UOB Group’s FX analysts Quek Ser Leang and Peter Chia notes.  

Likely to trade in a 149.40/150.35 range

24-HOUR VIEW: “We did not anticipate USD to soar to 150.32 (we were expecting range trading). The advance appears to be running ahead of itself, and USD is unlikely to rise much further. Today, USD is more likely to trade in a 149.40/150.35 range.”

1-3 WEEKS VIEW: “We have held a positive USD view since the start of this month. As we tracked the advance, we indicated two days ago (16 Oct, spot at 149.10) that ‘the price action over the past few days did not result in further increase in momentum.’ We highlighted that ‘a breach of 148.40 (‘strong support’ level) would indicate that USD is not rising further.’ Yesterday, USD broke clearly above 150.00, reaching a high of 150.32. Momentum has improved, albeit not much, and it remains to be seen if USD could rise to 151.00. On the downside, the ‘strong support’ level has moved higher to 149.00 from 148.40.”

• USD/JPY softens to near 150.05 despite stronger USD in Friday’s Asian session. 
• Japan's CPI inflation drops from 3.0% to 2.5% in September. 
• The upbeat US economic data strengthens the case for 25 bps Fed rate cuts.

The USD/JPY pair edges lower to around 150.05 despite the firmer US dollar (USD) on Friday during the early Asian session. Investors will keep an eye on the US Building Permits and Housing Starts, which are due later on Friday. The Federal Reserve’s (Fed) Raphael Bostic, Neel Kashkari and Christopher Waller are also set to speak later in the day. 

Japan's annual Consumer Price Index (CPI) rose 2.5% in September, compared to 3.0% reported in August, the Statistics Bureau of Japan showed on Friday. Meanwhile, the CPI excluding fresh food and energy grew 2.1% year-over-year in September. The CPI excluding fresh food climbed by 2.4% on an annual basis during the same period. The figure came in slightly stronger than the consensus estimate of 2.3%.

The slowdown in price gains might have a limited impact on the Bank of Japan’s (BoJ) policy path. The BoJ Governor Kazuo Ueda said the Japanese central bank will keep raising rates if inflation remains on track to stably hit the 2% target, adding that the BoJ will spend time gauging how global economic uncertainties affect Japan's fragile recovery. The BoJ is widely expected to hold the benchmark rate steady on October 31. 

“The BOJ is waiting to see how the US economy holds up before raising rates further. We think it will be able to confirm a US soft landing by the time it holds its January board meeting,” noted Taro Kimura, economist from Bloomberg Economics. 

On the USD’s front, the stronger-than-expected US September Retail sales indicated the US economy maintained a strong growth pace in the third quarter. This, in turn, might cap the downside for the US Dollar (USD). 

The US Fed is likely to maintain a very cautious approach to cutting rates. Atlanta Fed President Bostic said that he has one more 25 bps rate cut pencilled in for this year. Minneapolis Fed President Neel Kashkari stated that future interest rate cuts would be “modest” and emphasized that policy decisions would depend on economic data. Money markets are now pricing a 90.3% probability of a 25bps rate cut next month, according to the CME Fed Watch Tool.