Dollar Declines

2025-12-22 14:29 By Joana Taborda 1 min. read

The dollar index fell below 98.4 on Monday, moving closer to its October lows, as expectations grew that the Fed will continue to ease monetary policy.

Markets are currently pricing in two interest-rate cuts in 2026, also supported by US President Trump’s calls for lower borrowing costs.

However, Fed officials remain divided on the policy outlook.

Cleveland Fed President Hammack said on Sunday that monetary policy is well positioned to pause, allowing time to assess the economic impact of the cumulative 75 bps of rate cuts already delivered.

Meanwhile, Governor Miran reiterated last week that further easing is warranted, citing signs that inflation has cooled.

Adding to the dollar’s weakness, precious metals rallied, supported by safe-haven demand amid rising geopolitical tensions between the US and Venezuela.

The greenback was particularly weak against the Japanese yen, after the Bank of Japan delivered a rate hike last week, pushing borrowing costs to their highest level since 1995.



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