The Federal Reserve appears set to maintain its current interest rate policy, with no immediate rate cuts anticipated this month. The central bank, having already shifted to a more gradual easing cycle in December, is likely to hold interest rates steady at 4.25% – 4.5% throughout 2025. This stance comes amidst a robust U.S. jobs report that has bolstered the U.S. Dollar.
Nonfarm Payrolls saw a significant increase of 256,000 in December, surpassing expectations and alleviating concerns about a weakening labor market. This positive employment data has strengthened the U.S. Dollar, creating ripple effects across various currency pairs. The GBP/USD pair has extended its weekly decline, trading below 1.2250, while the EUR/USD remains under bearish pressure, trading below 1.0300.
“Concerns over substantial weakening in the jobs market have continued to ease, leaving the Fed with much less urgency to cut interest rates.”
The Federal Reserve's December pivot towards a more gradual easing cycle suggests stability in its monetary policy approach. Analysts believe the odds of an additional rate cut this month are low, reinforcing expectations that the central bank will maintain its current rate throughout the year.
“The Fed already pivoted to a more gradual easing cycle in their last meeting In December. We think the odds of an additional rate cut this month are low, and the central bank will more likely be holding rates steady at the current 4.25% – 4.5% range throughout 2025.”
The strong U.S. Dollar has influenced other markets as well. Gold prices, supported by a risk-averse market environment, have regained traction and climbed towards $2,700 after an earlier dip towards $2,660. The renewed strength of the USD continues to play a role in this resurgence.
In the cryptocurrency space, on-chain metrics indicate potential for a rally ahead for SUI. The long-to-short ratio for SUI has reached its highest level in over a month, signaling increased investor confidence. Additionally, open interest in SUI is rising, suggesting heightened market activity and potential price movements.
Sui's price has shown resilience by recovering most of its weekly losses and trading around $5.06. This recovery indicates positive sentiment among investors, aligning with broader market trends and the strengthening U.S. Dollar.