The US dollar fell in the last 24 hours and lost more than half a per cent against a basket of major currencies. The decline followed the conclusion of the Federal Reserve’s FOMC meeting, which, as widely expected, delivered a 25bp interest rate cut. The decision was not unanimous, with some Fed officials adopting a hawkish stance and voting against the reduction in borrowing costs. Speaking after the announcement, Jerome Powell highlighted significant downside risks in the US labour market, leaving the door open for further cuts in 2026. Following his comments, money markets priced in expectations of at least one additional rate cut next year, although traders see it as unlikely to materialise at January’s meeting. This scenario keeps the path of least resistance for the dollar tilted to the downside, with any disappointing economic data likely to deepen the currency’s losses. Against this backdrop, investors will be closely watching today’s release of US initial jobless claims. A lower-than-expected figure could help limit the dollar’s losses, while a rise in new claimants exceeding the previous reading may reinforce the bearish outlook for the Fed and add further pressure on the greenback.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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