US Dollar Weakens Below 98
The US dollar weakened slightly below 98 on Monday and moved flat near its lowest level since early October. Market movements remained quiet due to the year-end holidays, so volatility tended to be limited.
The dollar's weakness was also influenced by market expectations that US interest rates could still fall next year. Investors are still pricing in the possibility of two rate cuts in 2026, which has maintained pressure on the dollar.
However, the Fed's policy direction is not yet fully unanimous. Federal Reserve officials are said to remain divided, and most internal projections point to only one additional cut.
Another factor being monitored is the planned replacement of central bank leadership. President Donald Trump is expected to announce Jerome Powell's replacement as Fed Chair in early 2026, and this move could potentially influence market expectations about how quickly interest rates will be cut.
In the near term, investor attention will be focused on the release of the FOMC minutes, scheduled for Tuesday. This document typically provides clues to the Fed's internal debate and signals the direction of future monetary policy.
Speculation has it that the dollar is on track to decline by more than 9% through 2025, which would be the deepest decline since 2017. The dollar is under pressure from Trump's aggressive tariff policies and market concerns about threats to the Fed's independence. (asd)
Source: Newsmaker.id
