The US Dollar is facing downward pressure as the dollar index hovers near a seven-week low. Concerns about a cooling labor market are fueling expectations for Federal Reserve rate cuts. Market participants are closely monitoring upcoming economic data releases, particularly inflation reports, to gauge the Fed’s next policy move.
- The dollar index steadied at 97.4, near its weakest level in almost seven weeks.
- Mounting concerns over a cooling labor market strengthened expectations for Federal Reserve rate cuts.
- Investors await US benchmark revisions for employment covering April 2024 to March 2025, with economists projecting downward adjustments of up to 800,000 jobs.
- Two key inflation reports are due this week: the August producer price index and the consumer price index.
- Markets currently see an 89% chance of a 25 basis point cut at next week’s meeting.
- Some participants are positioning for a larger 50 basis point move.
The US Dollar’s outlook is uncertain amid speculation about future monetary policy decisions. The potential for lower interest rates, driven by concerns over employment and economic growth, is weighing on the currency’s value. Upcoming economic data releases will be crucial in determining the extent of any further declines or potential stabilization.