Dollar Extends Weekly Gaining Trend as Traders Trim Fed Cut Bets

Traders are pushing the dollar toward its second-straight weekly gain in anticipation of a slower pace of interest-rate cuts by the Federal Reserve.

The Bloomberg Dollar Spot Index has climbed 0.5% this week, extending its gains so far in October to 1.7% as resilient US economic data boosted expectations for a more cautious Fed — even as some other central banks consider additional monetary easing to aid their local economies.

Money markets reflect traders’ expectations US officials will lower borrowing costs by no more than a quarter-point in November.

“The US dollar’s strength is likely due to the market’s discussion shifting to ‘pause or not’ from ‘the size of the cut’ in November,” said Yusuke Miyairi, a currency strategist at Nomura International Plc.

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