FX Futures and the Fed Decision Euro FX FuturesCME:6E1!CME_GroupThe foreign exchange futures markets experienced a week dominated by divergent central bank signals, leading to significant price action across major currency pairs. The Euro and the Japanese Yen futures contracts saw sustained upward momentum against the U.S. Dollar. The Euro was buoyed by comments from European Central Bank officials who pushed back against aggressive rate-cut expectations, suggesting Eurozone inflation remains stickier than anticipated. Simultaneously, the Yen futures rallied sharply as the market intensified speculation that the Bank of Japan might be preparing to exit its negative interest rate policy sooner than expected, following strong domestic wage growth data. This dual pressure on the U.S. Dollar, driven by tighter monetary policy outlooks abroad, created a favorable environment for non-Dollar currencies. Traders today saw the announcement from the Fed where interest rates were cut by 25-basis points, which was anticipated going into the meeting. There was volatility across asset classes outside of the currencies and equity prices were able to finish the day positive, which was led by the Russell trading up near 1.4%. Silver had another strong day as well trading up over 2% to a new all time high price $60.40/oz. Looking at the FedWatch now, there is a 77% probability that in the January meeting, the Fed will keep rates unchanged, but that figure has been volatile over the last few months and traders will be watching markets as we wrap up 2025 to see if this changes. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs tradingview.com/cme/ *CME Group futures are not suitable for all investors and involve the risk of loss. Copyright © 2023 CME Group Inc. **All examples in this report are hypothetical interpretations of situations and are used for explanation purposes only. The views in this report reflect solely those of the author and not necessarily those of CME Group or its affiliated institutions. This report and the information herein should not be considered investment advice or the results of actual market experience.