FX.co ★ Dollar Falls to Kick Off December

On the first trading day of December, the dollar index dropped below 99.2, continuing November's 0.3% decrease. This movement is due to traders factoring in an anticipated 25 basis points cut to the federal funds rate expected next week, with market odds for such an adjustment exceeding 87%. President Trump announced on Sunday his selection for the next Federal Reserve Chair, with reports suggesting White House National Economic Council Director Kevin Hassett as a primary contender. This week, investors are paying close attention to several critical economic data releases, including the delayed September PCE report. Meanwhile, the ISM Manufacturing PMI indicated a contraction in the factory sector for the ninth straight month, and the pace of this contraction has accelerated. The dollar has weakened mainly against the Japanese yen, trading near two-week lows, fueled by increasing expectations of a Bank of Japan rate hike this month following comments from Governor Ueda.