MAS Holds Monetary Policy Steady as Strong Growth Raises Inflation Risks 
U.S. Urges Japan on Monetary Policy as Yen Volatility Raises Market Concerns 
ECB’s Cipollone Backs Digital Euro as Europe Pushes for Payment System Independence 
BOJ Holds Interest Rates Steady, Upgrades Growth and Inflation Outlook for Japan 
New York Fed President John Williams Signals Rate Hold as Economy Seen Strong in 2026 
RBA Raises Interest Rates by 25 Basis Points as Inflation Pressures Persist 
ECB Signals Steady Interest Rates as Fed Risks Loom Over Outlook 
Markets React as Tensions Rise Between White House and Federal Reserve Over Interest Rate Pressure 
BOJ Rate Decision in Focus as Yen Weakness and Inflation Shape Market Outlook 
The dollar relinquished gains after the Fed left rates on hold and failed to provide any clues for the timing of the next rate increase.
But the center of FOMC lining up closer to Lacker, hawks for December.
FOMC highlights ‘improved’ business and consumer sentiment.
The FxWirePro currency strength index for the dollar was little changed, relinquishing its first gain for the week after gaining as much as 0.3% on stronger-than-expected ADP jobs and ISM manufacturing data.
The greenback appeared to be trying to find equilibrium amid muted and erratic foreign exchange flows that pushed the euro initially to a fresh low at 1.0756 while USDJPY fell back to below 113.013 after the Fed announcement.
The advance US GDP for Q4 was on the weaker side of expectations although most of the miss was attributable to net exports - they subtracted a chunky 1.7ppts from growth.
Even USD/JPY 1w vols are at the low range of expiries covering a BoJ meeting. Thus the vol softening looks more like temporary setback than a full-fledged vol cleanout, where there remain unresolved issues for global growth (how much growth will Trump's program actually deliver, how does an equity bull run reconcile with a Fed tightening cycle) and the spectrum of a tail-risk sell-off continues to loom over bond markets.
Amid all these developments OTC functionality for the dollar has been intensified. Please be noted that the IVs of dollar crosses are spiking of across various tenors, while delta risk reversals also indicate a shift in hedging sentiments that shows offloading in heavy downside risks.
