Archive · 27 Dec 2025
Dollar Weakens Amid Fed Rate Cut Expectations
The US dollar had its worst week since June because people who invest money are waiting for important reports about the US economy.
These reports will help decide if the Federal Reserve, which controls interest rates, will cut rates again.
The dollar has been getting weaker this year, and people think it will keep going down.
The Federal Reserve has already cut rates three times to help the economy grow.
People are also watching the job market and inflation numbers to see what will happen next.
The dollar's weakness has made other currencies, like the Australian dollar, stronger.
The dollar posted its worst week since June as traders await US economic reports.
The Bloomberg Dollar Spot Index fell 0.8% this week and is down 8% this year.
Traders expect the Federal Reserve to cut rates again, with a 90% probability of a cut next month.
US unemployment data showed the jobless rate rising to its highest since 2021.
Consumer inflation readings were lower than expected, contributing to dollar weakness.
- Who
- Federal Reserve, Traders, Investors
- What
- Dollar weakening, Fed rate cut expectations
- When
- Friday, with focus on upcoming economic reports
- Where
- Global financial markets, US
- Why
- Expectations for Fed rate cuts, weak economic data
- Currency Index
- Bloomberg Dollar Spot Index
- Weekly Change
- 0.8% decrease
- Annual Change
- 8% decrease (worst since 2017)
- 10-Year Treasury Yield
- 4.13%
- Fed Rate Cut Probability
- 90% for next month, additional cuts expected by mid-year
- Unemployment Rate
- Highest since 2021
- Consumer Inflation
- Lower-than-expected readings
Sources
Yen weaker in thin trading as traders stay alert to intervention risk
Yen weaker in thin trading as traders stay alert to intervention risk
Dollar posts worst week since June as traders focus on upcoming economic reports out of US
