Dollar Hits Near 12-Week Low

2025-12-24 02:16 By Kyrie Dichosa 1 min. read

The US dollar weakened further to around 97.7 on Wednesday, hitting its lowest level since early October, as investors continued to bet that the Federal Reserve has room to cut rates next year.

Initial data showed a solid US GDP growth in Q3 but failed to alter the rate outlook.

Markets are pricing in two rate cuts in 2026 amid easing inflation, a moderating labor market, and President Trump’s push for looser policy, even as Fed officials remain divided.

Additionally, safe-haven flows into precious metals, rising geopolitical tensions, and gains in the yen, following the Bank of Japan’s rate hike and potential intervention by authorities, have further pressured the greenback, reinforcing expectations of policy divergence and typical year-end weakness.

The dollar is also on track for its worst annual performance in more than two decades, after a turbulent year marked by Trump’s tariffs and concerns over his influence on the Fed’s independence.



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