Dollar Falls Amid Mounting Pressures and Rising Expectations of U.S. Rate Cuts
The U.S. dollar opened Thursday’s session lower as investors increasingly priced in the likelihood of a Federal Reserve interest rate cut in September, following signals that such a move could be on the table.
The greenback is also facing renewed pressure from President Donald Trump’s escalating efforts to exert greater influence over monetary policy, including attempts to remove Federal Reserve Board member Lisa Cook and replace her with an ally.
In currency markets, the dollar index — which tracks the U.S. currency against a basket of six major peers — held at 98.135 points after two straight days of declines. The euro edged up 0.07% to $1.1646, while sterling rose 0.03% to $1.3504. The dollar slipped 0.11% against the Swiss franc to 0.8017, but gained 0.05% against the Japanese yen to 147.47.
On the international front, Japanese news agency Kyodo reported that chief trade negotiator Ryusei Akazawa canceled a planned visit to Washington, which was expected to finalize details of a Japanese investment in the United States under a bilateral tariff agreement.
Markets are now focused on key economic data ahead of the Fed’s September 16–17 policy meeting. The core Personal Consumption Expenditures (PCE) price index, due Friday, is the central bank’s preferred measure of inflation, while the monthly jobs report is scheduled for release next week.
Traders are currently assigning an 84% probability to a 25-basis-point rate cut next month, with expectations of a total reduction of 56 basis points by the end of the year.
Elsewhere, the dollar eased 0.04% against the offshore Chinese yuan to 7.1491, while the Australian dollar inched up 0.09% to $0.6512.
