Dollar Awaits Fed Direction
The US dollar index fluctuated around 98.4 on Friday (December 19) and is expected to close the week relatively unchanged. Investors are still weighing the chances of a Federal Reserve interest rate cut next year, as inflation continues to decline and signs of weakness in the US labor market emerge.
The latest inflation data indicates price pressures are easing. The November CPI report showed headline inflation fell to 2.7%, the lowest since July and below market expectations. Core inflation also weakened to 2.6%, the slowest pace since early 2021. Meanwhile, the unemployment rate rose to 4.6% in November, its highest level since 2021, indicating a cooling labor market.
The combination of low inflation and a softening labor market gives the Fed more room to cut interest rates in 2026, although markets expect policy to remain steady in January. Market sentiment was also influenced by Donald Trump's announcement that he would soon announce the next Fed chairman, with names such as Kevin Hassett, Kevin Warsh, and Christopher Waller being mentioned as strong candidates, seen as pro-interest rate cuts. (az)
Source: Newsmaker.id
