FX.co ★ DXY Falls to 1-Month Low

The US dollar index declined below the 99 mark on Wednesday, reaching its lowest point in over a month. This drop comes amid increasing signs of a weakening US labor market, which has solidified expectations for a Federal Reserve rate cut next week. According to new data from ADP, there was a 32,000 decrease in private-sector jobs in November, a stark contrast to the anticipated 10,000 job increase, marking the third decline in four months and the steepest drop in hiring indicators since 2023. This data aligns with recent dovish commentary from influential FOMC members like New York Fed President John Williams and Board Governor Christopher Waller, who have emphasized addressing the slowing labor market. Rate futures now suggest there is an almost unanimous expectation of a 25 basis point rate cut next week, with one or two more possible cuts anticipated next year. Meanwhile, in the Eurozone, inflation has inched higher, and in Japan, rising wages have prompted Bank of Japan officials to hint at a forthcoming rate hike, bolstering the major counterparts of the DXY index.