USD breaks above 200-DMA amid lower rate cut odds – BBH

FXStreetNov 20, 2025 10:15 AM

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US Dollar (USD) has powered above its 200-day moving average as Fed funds futures slashed rate cut bets. The US employment data void and hawkish FOMC October meeting minutes led markets to reduce odds of a December 25bps rate cut by more than 15pts to as low as 27%. In parallel, Nvidia’s blowout revenue is boosting stocks and pouring more fuel on the AI-driven exuberance, BBH FX analysts report.

FOMC minutes highlight high bar for December cut

"Yesterday, the US Bureau of Labor Statistics (BLS) confirmed the cancellation of the October non-farm payrolls (NFP) report and delayed the November NFP print to December 16, which is after the December 10 FOMC policy decision. That means the September NFP data (1:30pm London, 8:30am New York) and October JOLTS release on December 9 carry extra weight - they’re the Fed’s only major jobs check before showtime."

"NFP is expected at 51k vs. 22k in August, consistent with the breakeven pace of job gains (between 30k and 50k) required for keeping the unemployment rate steady. The unemployment and participation rates are seen unchanged at 4.3% and 62.3%, respectively. For reference, ADP private employment fell -29k in September while Revelio labs non-farm employment (private and public) rose 33k. The decline in the hiring rate suggests labor demand is weak and points to downside risk to today’s NFP print. Softer than expected September job gains will trigger a swift USD pullback and weigh on the short end of the Treasury yield curve. However, solid jobs gains in September will give the USD’s upswing a stronger fundamental anchor."

"The FOMC October 28-29 meeting minutes indicates that the bar for a December rate cut is high. “Several participants assessed that a further lowering of the target range for the federal funds rate could well be appropriate in December…[But] Many participants suggested that…it would likely be appropriate to keep the target range unchanged for the rest of the year.” Many is a greater number than several."

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