The euro slipped in European trading on Thursday to its lowest level in two weeks against the US dollar, extending losses into a fifth consecutive session as investors continued to favor the US currency as the most attractive asset, especially after the latest Federal Reserve minutes, which reduced expectations of a rate cut in December.

Investors now look ahead to upcoming key economic data releases in the euro area in order to gather fresh evidence on whether the European Central Bank may move to cut interest rates in December.

Price Overview

• EUR/USD today: the euro fell 0.25% against the dollar to 1.1510 dollars — the lowest since November 6 — from an opening level of 1.1537 dollars, after touching an intraday high of 1.1542 dollars.

• The euro ended Wednesday’s session down 0.4% against the dollar, marking a fourth straight daily loss due to the impact of the Fed minutes.

US Dollar

The dollar index rose 0.2% on Thursday, extending gains into a fifth consecutive session and hitting a two-week high of 100.32 points, reflecting continued strength in the US currency against a basket of global peers.

The minutes of the Federal Open Market Committee meeting held on October 28–29, released Wednesday in Washington, showed that “many” policymakers opposed cutting the Federal Reserve’s benchmark interest rate at that meeting.

The minutes stated that many participants believed that, based on their economic projections, it would likely be appropriate to keep the target range for interest rates unchanged through the end of the year.

However, some members noted that an additional cut in December “could indeed be appropriate if the economy performs roughly in line with their expectations” ahead of the next meeting.

US Interest Rates

• Following the minutes, and according to CME’s FedWatch Tool, the implied probability of a 25-basis-point rate cut in December fell from 48% to 30%, while the probability of holding rates steady rose from 52% to 70%.

• To reprice these expectations, investors are awaiting the release of new US job-openings data for September, which was delayed for more than 48 hours due to the longest government shutdown on record.

Eurozone Interest Rates

• Money-market pricing for a 25-basis-point rate cut by the European Central Bank in December remains steady at around 25%.

• To reprice these expectations, investors are monitoring a range of economic indicators in Europe, in addition to comments from ECB policymakers.

The Japanese yen declined in Asian trading on Thursday against a basket of major and minor currencies, deepening its losses for a fifth consecutive session against the US dollar and hitting the lowest level in ten months, as investors continued to favor the dollar as the most attractive asset, especially after the reduced expectations of a Federal Reserve rate cut in December.

The losses also came amid market expectations that the new Japanese government led by Sanae Takaichi will introduce a large stimulus package supported by low interest rates to boost weak economic activity in the country. Meanwhile, Finance Minister Satsuki Katayama denied that exchange-rate issues were discussed during the meeting between the prime minister and the Bank of Japan governor.

Price Overview

• USD/JPY today: the dollar rose more than 0.2% against the yen to 157.47 yen — the highest since January — from an opening level of 157.14 yen, after recording an intraday low of 156.87 yen.

• The yen ended Wednesday’s session down 1.1% against the dollar, marking a fourth straight daily loss, pressured by Takaichi’s stimulus plans and the finance minister’s remarks.

US Dollar

The dollar index rose 0.2% on Thursday, extending gains into a fifth straight session and reaching a two-week high of 100.32 points, reflecting continued strength in the US currency against a basket of global counterparts.

The minutes of the Federal Open Market Committee meeting held on October 28–29, released Wednesday in Washington, showed that “many” policymakers opposed cutting the Fed’s benchmark rate at that meeting.

The minutes noted that many participants believed that, based on their economic projections, it would likely be appropriate to keep the target rate unchanged through the end of the year.

However, some members indicated that an additional cut in December “could indeed be appropriate if the economy performs roughly in line with their expectations” ahead of the next meeting.

Following the release, and according to CME’s FedWatch Tool, the pricing for a 25-basis-point rate cut in December fell from 48% to 30%, while the probability of leaving rates unchanged rose from 52% to 70%.

Stimulus Package

Kyodo News reported that the Japanese government is planning a stimulus package exceeding 20 trillion yen (about 129 billion dollars) to support the economy amid inflationary pressures and rising living costs. Most of the package is expected to be financed through an additional supplementary budget estimated at 17 trillion yen.

The yen has fallen more than 6% since Prime Minister Sanae Takaichi was elected leader of her party, despite rising Japanese bond yields, as markets remain concerned about the large amount of borrowing required to fund her stimulus plans.

Finance Minister Katayama

Finance Minister Satsuki Katayama stated that no specific discussions took place regarding foreign-exchange levels during Prime Minister Takaichi’s meeting with Bank of Japan Governor Kazuo Ueda this week. Katayama added that the Japanese government is monitoring the markets very closely.

Japanese Interest Rates

• Market pricing for a Bank of Japan rate hike of 25 basis points in December remains steady at around 35%.

• To reprice these expectations, investors are awaiting additional data on inflation, unemployment, and wage trends in Japan.

Renewable energy is booming across emerging economies, where the economic viability of wind and solar power has made them the obvious choice in most national and regional contexts. More importantly, the rapid shift in renewable-energy economics is not only saving developing countries money but could also deliver substantial financial gains in the coming years.

A recent study from the University of Oxford indicates that low- and middle-income countries stand to benefit the most from adopting renewable energy, with potential GDP gains of around 10% over the next 20 to 25 years if they pursue a rapid transition. The report notes that this renewable-driven economic growth has already begun: investments in renewable energy across the world’s 100 largest developing nations (excluding China) contributed roughly 1.2 trillion dollars to GDP growth between 2017 and 2022 — equivalent to around 2% to 5% of GDP in most of these economies.

The report’s executive summary states: “Renewable energy drives prosperity… and when implemented properly, it can expand affordable energy access, attract investment, create new jobs, and raise productivity across the entire economy.”

Several interconnected factors explain this trend. First, renewable-energy sources have become dramatically cheaper to install and operate. Solar power, in particular, has undergone a remarkable economic transformation, with prices falling by 90% since 2010. Sam Stranks, Professor of Energy and Optoelectronic Materials at the University of Cambridge, told New Scientist: “Solar panels made from silicon now cost roughly the same as plywood.” As a result, renewable energy now delivers far higher investment returns than fossil fuels. The report also notes that green-energy spending tends to remain within the local economy, supporting domestic supply chains and directly increasing local income — unlike the fossil-fuel sector.

Renewables also offer better solutions for rural and underserved areas. “Decentralized energy solutions such as small-scale solar systems or rooftop panels can reach rural regions where electricity grids are costly and unreliable,” Semafor reported.

Pakistan provides a clear example, experiencing a “solar-power revolution” as households increasingly adopt solar-plus-battery systems as a reliable and affordable alternative to local grids, which are expensive, unstable, and often inaccessible. Pakistan has rapidly become “one of the world’s major new adopters of solar power.” Jan Rösner, Head of Energy Programmes at Oxford’s Environmental Change Institute, said: “The scale of solar installations being rolled out in such a short time is unlike anything we’ve seen elsewhere.”

Pakistan is far from alone. Emerging markets are adding renewable capacity at a stunning pace. In recent years, countries such as Brazil, Chile, El Salvador, Morocco, Kenya, and Namibia have surpassed the United States in their clean-energy transition, with 63% of markets in Africa, Asia, and Latin America relying more heavily on solar power for electricity generation than the US does. CNN reported that “some countries are implementing energy transitions at astonishing speed, adding solar capacity so quickly that it has become a major source of electricity within just a few years — not decades.”

This global shift has been enabled largely by China’s low-cost renewable-energy components. Despite concerns about China’s growing influence over the energy sectors of low- and middle-income countries, its affordable supply chains have transformed global energy markets in critical ways. Without access to inexpensive clean energy, many developing economies would have required massive financial support to achieve sustainable growth — funding repeatedly promised by Western powers through climate finance but often not delivered.

Despite ongoing challenges in the clean-energy transition, and even amid political pushback against renewables in the world’s largest economy, renewable energy has simply become too cheap to fail. As New Scientist wrote: “We now have an abundant, cheap electricity source that can be built quickly almost anywhere in the world… Is it really far-fetched to imagine solar providing power for everything one day?”

The minutes of the Federal Reserve’s October meeting, released on Wednesday, showed that policymakers were divided over the decision to cut interest rates, reflecting disagreements about whether a cooling labor market or persistent inflation posed the greater threat to the economy.

Although the Federal Open Market Committee approved a rate cut at the meeting, the path for monetary policy in the coming period has become less clear. The divisions extended to expectations for December, with several officials expressing doubts about the need for an additional cut that investors had widely anticipated. “Many” participants said there would be no need for further easing at least through 2025.

The minutes stated: “A number of participants judged that an additional cut could be appropriate in December if the economy evolves as they expect between the two meetings. Many participants indicated that, under their economic scenarios, it would be appropriate to keep the target range unchanged for the rest of the year.”

In Fed language, “many” signifies a larger group than “a number of,” indicating a tilt against a December cut. But the term “participants” does not necessarily refer to voting members. Nineteen officials attended the meeting, but only twelve are eligible to vote, leaving the direction of the actual votes unclear.

These signals align with Chair Jerome Powell’s comments during the press conference after the meeting, where he emphasized that a December cut was “not a foregone conclusion.”

Before Powell’s remarks, traders had priced in an almost certain cut at the 9–10 December meeting. By Wednesday afternoon, those odds had fallen to less than one-third.

The minutes also noted that “most participants” still expect that more cuts may eventually be needed, though not necessarily in December.

Ultimately, the committee approved a quarter-point cut, bringing the federal funds target range to 3.75%–4%. The 10–2 vote, however, understated the degree of division within an institution known for its consensus.

Officials expressed broad concern about a softening labor market and persistent inflation that “has shown little evidence” of a sustainable move back to the 2% goal. The minutes highlighted several distinct camps within the committee.

“In this context,” the minutes said, “many participants viewed reducing the target range as appropriate at this meeting, while some supported the move but were also prepared to keep the range unchanged, and a number of others opposed a cut.”

A major point of contention was how restrictive policy currently is. Some participants judged that policy remained sufficiently tight even after the quarter-point cut, while others argued that “the resilience of economic activity” suggested policy was not restrictive enough.

Public remarks indicate a split between “doves” such as Stephen Miran, Christopher Waller, and Michelle Bowman, who favor cuts to protect the labor market, and “hawks” such as Kansas City Fed President Jeffrey Schmid, Boston’s Susan Collins, and San Francisco’s Alberto Musalem, who worry that further easing could hinder progress on lowering inflation.

In the middle are moderates including Powell, Vice Chair Philip Jefferson, and New York Fed President John Williams, who prefer a more cautious approach.

The minutes noted that one participant — a reference to Miran — favored a larger half-point cut. Schmid voted against the move, saying he preferred no cut at all.

The lack of government data for 44 days — due to the government shutdown — further complicated decision-making, since key labor, inflation, and other economic indicators were neither collected nor published. Agencies such as the BLS and BEA announced revised schedules for some releases, but not all.

Powell compared the situation to “driving through fog,” while Waller rejected that analogy earlier this week, insisting the Fed has sufficient information to make policy decisions.

The minutes also addressed the balance sheet. The committee agreed to halt the runoff of Treasuries and MBS in December — a process that has already reduced the balance sheet by more than $2.5 trillion, though it still stands near $6.6 trillion. Support for ending quantitative tightening appeared broad.