The dollar index was under increasing pressure on Monday, falling to a two-week low as bets on a Fed rate cut at its final policy meeting of the year re-emerged.
At 10 a.m., the U.S. Dollar Index (DXY) was at 99.421, unchanged since it opened early Tuesday in Asian trading.
The latest economic data showed that the U.S. manufacturing sector remained weak, contracting for the ninth straight month.
Rising input price pressures and a sharp drop in new orders showed the sector’s momentum was fading, adding to the dollar’s performance.
A report released today showed that the U.S. manufacturing sector continued to trend downward for the ninth straight month, driven by rising input prices and a sharp drop in new orders. This development added to the pressure on the U.S. dollar.
Market bets on a Fed rate cut strengthened after a series of weak U.S. economic data suggested that growth was slowing and inflationary pressures were easing, although they remained persistent in the world’s largest economy.
This change in sentiment has led money markets to price a near 88% chance of a quarter-point cut at the Fed meeting on December 9–10, compared to only around 40% the previous week.
At the same time, markets are also paying attention to President Donald Trump's statement that he has chosen a candidate for the next Fed Chair, although he did not reveal the identity of the individual.
