FX.co ★ Dollar Pressured by Dovish Fed Outlook

The dollar index declined to approximately 99.2 on Wednesday, nearing its lowest point in a month. This drop was influenced by prevailing anticipation of further rate cuts by the Federal Reserve, impacting the value of the U.S. currency. Additionally, the dollar faced downward pressure due to a risk-on sentiment spurred by the recovery in both bitcoin and stock markets. There is currently an estimated 89% probability of a 25 basis point rate cut occurring next week, with an additional 90 basis points of overall reductions anticipated by 2026. Further impacting the dollar was the speculation that Kevin Hassett, economic adviser to the White House, may be nominated as the next Federal Reserve chair. Hassett is known for advocating more rapid interest rate cuts, aligning with President Donald Trump’s economic agenda. Investors are now looking to the upcoming ADP employment report for November to gain further insight into the labor market's status.