The US Dollar (USD) failed to sustain yesterday’s gains and is back near the middle of the range that has been in place since June 2025. There are no policy-relevant economic data scheduled for release today, so markets should be calm, BBH FX analysts report.
Minutes from the Federal Open Market Committee (FOMC) meeting indicate possible adjustments in interest rates
“Today’s Fed speakers include: Richmond Fed President Tom Barkin (non-voter) and Fed Governor Stephen Meiran. Yesterday, Minneapolis Fed President Neel Kashkari (2026 voter) indicated he believes policy is ‘very close to neutral right now’ but warned that ‘there is a risk that the unemployment rate will rise from here’. The funds rate will likely be favorable later in the year.”
“Overall, it would not take much to convince a majority of FOMC members to implement the 50 basis point cuts set by federal funds futures in 2026. “Most participants viewed further downward adjustments to the target range for the federal funds rate as likely to be appropriate if inflation declines over time as expected,” the minutes of the December 9-10 FOMC meeting stressed.
“In our view, 2026 will be a year of increasing financial pressures as FX increasingly focuses on financial credibility alongside spreads. This should keep USD trading on the defensive. We will analyze this topic later this month in our quarterly report and webinar.”
