ING Bank Netherlands Says Fed Rate Hike Expectations Support Continued Strength of the Dollar

智通财经2026/10/08 08:01

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ING analyst Chris Turner stated that the Federal Reserve's September meeting minutes indicate the Fed still expects another interest rate hike this year, which continues to support the US dollar. Currently, the money market has priced in a 25 basis point rate hike in December and further policy tightening expected in 2027. ING believes that the market's expectations for rate hikes are overly aggressive, but a significant correction is unlikely in the short term. In addition, last night’s US 10-year Treasury auction performed strongly, with a high bid-to-cover ratio and robust indirect demand, indicating that as long as yields are high enough, there remains strong market demand for US Treasuries. This has provided solid support for the US dollar and has further boosted it in a somewhat challenging investment environment. Elevated US Treasury yields and increased market volatility have led to capital outflows from arbitrage trades, significantly impacting most Latin American currencies. Given the recent situation in Europe, we expect the US dollar to maintain its upward trend in the coming months.

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ING analyst Chris Turner stated that the minutes of the US Federal Reserve’s September meeting indicate the Fed still expects another rate hike this year, which continues to support the US dollar. The currency market has currently priced in a 25 basis point rate hike in December and expects further policy tightening by 2027. ING believes the market’s rate hike expectations are too aggressive, but a significant correction is unlikely in the short term. In addition, the US 10-year Treasury auction performed strongly last night, with both the bid-to-cover ratio and indirect bidding demand at high levels, suggesting that as long as yields are high enough, there remains strong market demand for US Treasuries. This has given the US dollar solid support and allowed it to strengthen further, even as the investment environment becomes somewhat challenging. The high US Treasury yields and rising market volatility have led to outflows from carry trade funds, significantly impacting most Latin American currencies. Considering the recent situation in Europe, we expect the US dollar to remain on an upward trend in the coming months.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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ING Bank Netherlands Says Fed Rate Hike Expectations Support Continued Strength of the Dollar

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