FX.co ★ DXY Falls to 8-Week Low

The dollar index declined to 98.35 on Thursday, reaching an eight-week low, influenced by weaker-than-expected U.S. data revealing a more significant rise in initial jobless claims for the week ending December 6. The Federal Reserve executed its third interest rate cut of a quarter-point for the year, while presenting a less aggressive outlook than market expectations had anticipated. Despite the Fed's forecasts indicating only one rate cut, traders maintain their expectation of two rate reductions by 2026. The central bank also announced it would initiate the purchase of short-term Treasury bills, beginning December 12, to bolster market liquidity. The first phase of this endeavor will involve a sum of approximately $40 billion. Additionally, the Fed revised its economic growth projections, now forecasting 2.3% growth for 2026, up from previous estimates of 1.8% in September, and predicting a 2% growth rate for 2027, slightly surpassing earlier predictions. The inflation outlook for 2025 has been adjusted to 2.5%, and for 2026 it is now projected at 2.4%, remaining modestly above the Federal Reserve's 2% target.