FX.co ★ Dollar Stabilizes as Fed Remains in Focus

The dollar index held steady around 99.6 on Friday, putting a pause on its recent decline and setting it up to close the month in a stable position. However, for the week, the index experienced a 0.5% drop, influenced by investor anticipation of further interest rate cuts by the Federal Reserve. Current market expectations have priced in an 87% likelihood of a 25 basis point reduction in December, with projections of three more cuts in the forthcoming year. These expectations were bolstered by reports suggesting that Kevin Hassett, the White House National Economic Council Director, is the frontrunner for the role of the next Fed Chair—a candidate perceived to be in line with President Donald Trump's preference for lower interest rates. Additionally, the demand for the dollar as a safe haven has diminished amid ongoing discussions about a potential peace agreement in Ukraine, which could positively impact the euro. The dollar is on track to record its most significant weekly decrease against the New Zealand dollar after the Reserve Bank of New Zealand indicated the conclusion of its current easing measures.