Skip to content 
by Reuters – On Thursday, the dollar index remained below the 101 mark, maintaining its weakest position in the last five months. This trend is largely influenced by strong expectations of a federal rate cut by the Federal Reserve in the upcoming year. Analysts have highlighted cooling inflation and the Federal Reserve’s strategy for a stable economic transition in the US as the main drivers behind these predictions.
Currently, the market is almost certain, with a 90% probability, of a rate cut by the Fed in March. Moreover, there’s an anticipation of up to 158 basis points in total rate reductions next year.
Traders are now keenly awaiting the release of jobless claims and pending home sales data for further direction. The dollar index is set to end the year with about a 2.6% loss, marking its first annual drop since 2020. The dollar’s weakness was especially evident on Thursday, facing the most significant declines against the Chinese yuan. This movement in the dollar index is a direct response to the anticipated fed rate cut.
About The Author
