Dollar Stays Weak Despite Small Bounce; Hassett Concerns Add to Pressure – ActionForex

Dollar attempted a mild recovery in Asia today, but the uptick lacked conviction and failed to alter the broader picture of USD underperformance. The greenback remains the weakest major this week, with selling pressure intensifying after Wednesday’s sharp drop in ADP employment that reinforced concerns about labor-market deterioration.

Expectations for a 25bps Fed cut next week are now effectively locked in, with market pricing hovering near certainty. Friday’s PCE inflation release could matter in theory, but it won’t meaningfully shift expectations or dissuade the Fed from delivering the December cut. Instead, attention is turning to what comes next, with November’s NFP and CPI—both arriving after the FOMC—likely to guide the early-2026 policy path.

A key emerging theme is political uncertainty around the Fed. Reports indicate that Kevin Hassett, President Trump’s top economic adviser, is being seriously considered as Powell’s successor. Hassett is well known for advocating lower interest rates and has supported Trump’s broader tariff and stimulus policies, raising questions about how independent the Fed’s next leadership might be.

The Financial Times reported that major bond investors have already voiced concerns to the Treasury over Hassett’s potential appointment. Several warned he may push for broad-based rate cuts even if inflation remains above the 2% target—raising fears of a more politically influenced Fed and a return to pro-cyclical policy. With Trump confirming he will announce his nominee early next year, the issue could become a market driver soon. While no decisive reaction has emerged yet, the next few weeks will be key in determining whether these fears become more fully priced into yields and USD positioning.

In the meantime, Dollar remains at the bottom of the weekly performance table, followed at a distance by Loonie and Swiss Franc. At the other end of the spectrum, Aussie thanks to hawkish RBA commentary, with Sterling and Kiwi close behind. Yen and Euro are sitting mid-pack, reflecting a broadly risk-on market tone that is helping higher-beta currencies outperform.

In Asia, Nikkei rose 2.33%. Hong Kong HSI rose 0.21%. China Shanghai SSE fell -0.04%. Singapore Strait Times fell -0.45%. Japan 10-year JGB yield rose 0.034 to 1.928, breaking above 1.9% mark. Overnight, DOW rose 0.86%. S&P 500 rose 0.30%. NASDAQ rose 0.17%. 10-year yield fell -0.029 to 4.057.

BoJ’s Ueda: Neutral rate uncertainty keeps BoJ guessing how far to tighten

BoJ Governor Kazuo Ueda told lawmakers today that Japan’s neutral interest rate remains highly uncertain, describing it as a concept that can only be estimated within a “quite wide range.” He noted that the central bank is attempting to narrow that range and may disclose updated estimates once confidence improves.

Ueda added that the lack of clarity around the neutral rate means the BoJ must operate without a firm sense of how much tightening is ultimately appropriate. This ambiguity, he said, leaves uncertainty around “how far we should raise interest rates,” even as policymakers consider more conventional policy settings after years of ultra-accommodation. Current BoJ estimates place the nominal neutral rate between 1% and 2.5%.

His comments come days after signaling that the BoJ will weigh the “pros and cons” of a rate hike at the upcoming December meeting, a remark markets interpreted as the strongest indication yet that a move to 0.75% is under consideration.

NZD/USD in bullish reversal? 0.5799 resistance holds key

NZD/USD extended its rebound from 0.5580 this week as the pair capitalized on a softer US Dollar, driven by the sharp deterioration in ADP employment data. The weak labor reading reinforced expectations of a December Fed rate cut, prompting another wave of USD selling across major pairs and giving the Kiwi room to advance. Underlying support also stems from the RBNZ’s hawkish cut last week, where policymakers signaled that the easing cycle has likely ended.

Technically, NZD/USD’s break above the 55 D EMA signals that the three-wave corrective decline from 0.6119 has likely completed at 0.5580. Momentum has clearly shifted to the upside, and the structure argues that the pair may now be in the early stages of a broader rally.

The next key hurdle is the 0.5799 support-turned-resistance. Sustained break above this level would further confirm bullish reversal and strengthen the view that the rise from 0.5580 represents the third leg of the larger pattern from 0.5484 low earlier this year.

That would also open the door through 0.6119 resistance, even if the advance from 0.5484 proves to be only a corrective rally within the broader downtrend from the 0.7463 (2021 high).

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AUD/USD Daily Report

Daily Pivots: (S1) 0.6569; (P) 0.6586; (R1) 0.6619; More...

AUD/USD’s rally from 0.6420 accelerates higher today and the solid break of 0.6579 resistance adds to the case that whole correction from 0.6706 has completed at 0.6420. Intraday bias stays on the upside for retesting 0.6709 and then 0.6713 key fibonacci level. For now, risk will stay on the upside as long as 0.6537 support holds, in case of retreat.

In the bigger picture, there is no clear sign that down trend from 0.8006 (2021 high) has completed. Rebound from 0.5913 is seen as a corrective move. Outlook will remain bearish as long as 38.2% retracement of 0.8006 to 0.5913 at 0.6713 holds. Break of 0.6413 support will suggest rejection by 0.6713 and solidify this bearish case. Nevertheless, considering bullish convergence condition in W MACD, sustained break of 0.6713 will be a strong sign of bullish trend reversal, and pave the way to 0.6941 structural resistance for confirmation.