Dollar Near Two-Month Lows Amid Fed Comments

2025-12-12 14:56 By Joana Ferreira 1 min. read

The dollar index hovered near two-month lows around 98.3, booking a third consecutive weekly decline, as investors digested Federal Reserve comments and reassessed the 2026 rate outlook.

The Fed cut rates by 25bps to 3.50%–3.75% this week, marking its third consecutive reduction, while maintaining expectations for just one more cut next year.

Kansas City Fed President Jeffrey Schmid, a dissenter, warned that inflation remains “too hot” and said policy should stay moderately restrictive.

Chicago Fed President Austan Goolsbee also opposed the cut, preferring to wait for more inflation data, though he expects more rate reductions in 2026 than most colleagues.

Philadelphia Fed President Anna Paulson, who will join the FOMC voting rotation next year, took a more dovish stance, citing labor market weakness as a greater concern than rising inflation.

Global developments also pressured the greenback, with hawkish moves in Australia, Canada, and Europe, leaving the dollar set to weaken broadly.



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