The US Dollar Index just can’t seem to catch a break, as on Thursday, it hovered nervously above 98, barely holding on after dropping to a new seven-week low at 98.13. Traders are increasingly leaning toward the view that the Fed will have to cut rates much deeper by 2026 than officials are willing to admit. That’s left the dollar looking weak and heavy, a mood that’s lingered ever since the Fed’s meeting on Wednesday.
Washington kept the pressure up, too. White House spokeswoman Karoline Leavitt said President Trump wants even lower borrowing costs. This came right after the Fed’s modest quarter-point cut. It’s another sign that political voices could keep pushing the Fed to loosen things up. Still, if you look at the Fed’s own projections, they’re only projecting one cut next year. So the gap between what traders expect and what the Fed’s saying is still very real.
Dollar Struggles, With Most Majors Pairs Outperforming
Currencies this week told the same story: the dollar lost ground against nearly all its major rivals. The Swiss franc led the pack, but the dollar also slipped against the euro, pound, Aussie, and kiwi. Only the yen came off worse. The mix isn’t exactly disastrous, but it does show a currency drifting—mostly edging lower, with no real direction.
Meanwhile, the CME FedWatch tool says traders haven’t waited for the Fed to spell things out. The odds of at least two cuts by October 2026 have jumped to about 58%. On top of that, weaker US economic data earlier in the week made people even more convinced the Fed will give in to market pressure, whether they like it or not.
Eyes on Jobs and Retail Data for the Next Move
Now, everyone’s waiting for the next big data drops. The November US jobs report lands Tuesday, and that one always stirs up talk about where rates are headed. Retail sales and early December PMI numbers are coming too, tossing a few more wild cards into the deck.
The labour market is in the spotlight. If job numbers come in soft, it’ll only add fuel to the talk that rate cuts are coming sooner—or in bigger chunks—than the Fed is willing to say out loud. But until those numbers hit, the dollar’s likely to keep wandering in the fog of rate-cut speculation.
