Federal Reserve Holds Key as Global Markets Brace for Rate Cuts

The dollar was mixed as markets awaited the Federal Reserve's anticipated rate cut, focusing on Fed Chair Jerome Powell's economic outlook amid a lack of government data due to the federal shutdown. Future rate cuts are expected with a softening labor market, though inflation concerns persist.

U.S. President Donald Trump, optimistic about an upcoming summit with China's Xi Jinping, aims to finalize trade deals and reduce tariffs. Concurrently, U.S. and Chinese trade relations bolster the greenback, while Trump's engagement with South Korea hints at geopolitical strategy shifts.

Globally, currency movements remain fluid with varying central bank policies. The European and Japanese central banks are anticipated to maintain rates, while Sterling and the Australian dollar shift based on inflation expectations and labor market data, all against a backdrop of domestic economic pressures.