FX.co ★ Dollar Remains Subdued

On Monday, the US dollar dipped below 98, hovering near its lowest point since early October, amidst the subdued trading typical of the holiday season. Market participants are speculating about rate cuts in the forthcoming year. Currently, investors are anticipating two additional rate cuts in 2026. However, within the Federal Reserve, opinions differ; most officials are predicting only one further reduction. The forthcoming appointment of a new Federal Reserve Chair by President Trump, expected in early 2026, is also anticipated to impact expectations concerning rate cuts. Traders are now turning their attention to the FOMC minutes scheduled for release on Tuesday, seeking more clarity on monetary policy. In 2025, the dollar is projected to experience an annual decrease exceeding 9%, marking its sharpest downturn since 2017, largely due to President Trump’s assertive tariff strategies and perceived threats to the Fed’s autonomy.