Dollar Weakens

2025-12-23 03:30 By Judith Sib-at 1 min. read

The dollar index fell toward 98 on Tuesday, its lowest since early October, amid prospects of more rate cuts by the Federal Reserve.

Markets are pricing in two quarter-point rate reductions in 2026, amid signs of easing inflation and a softening labor market, as well as President Trump's calls for looser monetary policy.

However, Fed officials remain deeply divided on the path forward.

Governor Miran warned on Monday that recession risks could rise unless monetary policy is adjusted.

Fed President Hammack said on Sunday that policy is currently well positioned to pause and assess the economic impact of the 75-basis-point cuts delivered this year.

Investors now await the second estimate of third-quarter GDP due later today.

Further weighing on the greenback, precious metals surged on safe-haven demand amid escalating US-Venezuela tensions.

The dollar weakened notably against the Japanese yen after the Bank of Japan raised its policy rate to a three-decade high.



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