FX.co ★ DXY Falls as US Consumer Sentiment Sanks

The dollar index declined to 99.4 as consumer sentiment in the United States hit its lowest point in over three years. The University of Michigan reported that its November consumer sentiment index fell to 50.3. This decline is attributed to the extended government shutdown, ongoing price pressures, and worsening personal financial situations. Current economic conditions have reached a historic low, with rising concerns about unemployment. In the absence of official data due to the shutdown, traders have turned to private reports, which indicate a slowdown in hiring and an increase in layoffs. This has bolstered expectations for monetary easing, with the markets currently forecasting about a 70% probability of a 25 basis point Federal Reserve interest rate cut in December. However, caution was advised by some policymakers, including Chicago Fed President Austan Goolsbee, who noted that the absence of official inflation data complicates future monetary policy decisions.