The currency market is under high pressure, Wall Street is betting on the Federal Reserve to temporarily increase liquidity injection.

Wall Street analysts have stated that the tight liquidity situation in the US currency market may continue in November, as financing costs remain high. The Federal Reserve may have to increase liquidity injections before officially ending its balance sheet shrinkage next month. Last Friday, the currency market experienced a volatile month-end, with overnight financing rates spiking 18 basis points in a single day, the largest one-day increase since March 2020 excluding rate hike cycles. Although SOFR saw a slight decrease on Monday as month-end pressures eased, it still remains higher than the key policy rates set by the Federal Reserve, including the federal funds rate. Other short-term overnight repurchase rates also remain higher than the Federal Reserve's policy tool rates.