{"id":35868,"date":"2025-12-03T14:42:31","date_gmt":"2025-12-03T06:42:31","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=35868"},"modified":"2025-12-03T14:42:31","modified_gmt":"2025-12-03T06:42:31","slug":"dollar-drifts-on-2026-rate-cut-bets","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-ca\/analysis\/dollar-drifts-on-2026-rate-cut-bets\/","title":{"rendered":"Dollar Drifts on 2026 Rate Cut Bets"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"559\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/image_fx_-64-1024x559.png\" alt=\"\" class=\"wp-image-17756\" \/><\/figure>\n\n\n\n<p><strong>Key Points<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The <strong>USDX dipped 0.1% to 99.202<\/strong>, on track for a <strong>near 9% annual decline<\/strong>, as traders priced in an extended U.S. easing cycle.<\/li>\n\n\n\n<li>Bitcoin reclaimed <strong>$93,633.70<\/strong>, lifting broader risk appetite and weighing further on the greenback.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity is-style-dots\" \/>\n\n\n\n<p>The U.S. dollar remained subdued on Wednesday, with the <strong>USDX easing to 99.202<\/strong>, down <strong>0.1%<\/strong> on the day and set for its worst year since 2020. The index has now fallen nearly <strong>9% year-to-date<\/strong>, a slide driven by rising expectations that U.S. rate cuts will deepen through 2026.<\/p>\n\n\n\n<p>Liquidity stayed stable, yet the broader tone suggests traders are preparing for a weaker dollar cycle. Futures markets continue to price in an aggressive easing path, with <strong>90 basis points of cuts<\/strong> now assumed before the end of 2026.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">US stocks closed higher to record their sixth gain in seven sessions in muted trading, buoyed by gains in technology shares as expectations the Fed will cut interest rates next week remain elevated <a href=\"https:\/\/t.co\/alBwmn5qXu\">https:\/\/t.co\/alBwmn5qXu<\/a> <a href=\"https:\/\/t.co\/ysjB2wMYYz\">pic.twitter.com\/ysjB2wMYYz<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1996041698498228284?ref_src=twsrc%5Etfw\">December 3, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>The muted dollar backdrop has allowed risk assets to recover. Bitcoin climbed <strong>2%<\/strong> on the day to <strong>$93,633.70<\/strong>, building on a <strong>6% surge<\/strong> in the previous session.<\/p>\n\n\n\n<p>After a painful November when the cryptocurrency sank by more than <strong>$18,000<\/strong>, this rebound has helped pull markets back into a more constructive stance.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">For as much as broader crypto markets have sunk these past two months \u2014 roughly 25% in the case of bellwether Bitcoin \u2014 projects that are tied to the Trump family are down far, far more <a href=\"https:\/\/t.co\/CqUyl0QW1v\">https:\/\/t.co\/CqUyl0QW1v<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/1996024829825184043?ref_src=twsrc%5Etfw\">December 3, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Euro Outperforms as ECB Seen Keeping Rates Steady<\/h2>\n\n\n\n<p>The euro strengthened as the U.S. dollar drifted, rising to <strong>$1.1640<\/strong> after clearing its 50-day moving average. Eurozone inflation came in slightly above expectations, firming support for the single currency.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Euro-area inflation inched up, supporting the European Central Bank\u2019s view that there\u2019s little reason to lower borrowing costs further <a href=\"https:\/\/t.co\/mWFL2BH3zG\">https:\/\/t.co\/mWFL2BH3zG<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/1995800349999862134?ref_src=twsrc%5Etfw\">December 2, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>The euro has already gained more than <strong>12% this year<\/strong>, making it one of its strongest annual performances since 2017. Traders see the ECB remaining on hold for the next several months, with markets pricing only a <strong>one-in-four chance<\/strong> of any easing next year.<\/p>\n\n\n\n<p>The shift in U.S.\u2013euro rate expectations continues to work against the greenback, particularly as tariff uncertainty earlier in the year had already weakened dollar demand.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Dollar Pressured by Fed Chair Speculation<\/h2>\n\n\n\n<p>Sentiment toward the dollar weakened further after speculation intensified that pro-rate cut White House economic adviser <strong>Kevin Hassett<\/strong> may become the next Fed chair. President Trump confirmed he would announce his nominee in early 2026.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\"><p lang=\"en\" dir=\"ltr\">Traders in US futures markets are gaming out a wide range of policy paths as they weigh the prospect of a Donald Trump\u2013backed Federal Reserve chair and a raft of delayed data that could reshape the economic outlook. <a href=\"https:\/\/t.co\/fPQi9gyr3N\">https:\/\/t.co\/fPQi9gyr3N<\/a><\/p>&mdash; Bloomberg (@business) <a href=\"https:\/\/twitter.com\/business\/status\/1995923696842645908?ref_src=twsrc%5Etfw\">December 2, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Markets remain highly sensitive to the prospect of a Fed leadership change. A more dovish chair could accelerate the easing cycle and reinforce the downward trajectory for the dollar into next year.<\/p>\n\n\n\n<p><strong>Deutsche Bank\u2019s Tim Baker<\/strong> warned that the dollar could fall roughly <strong>2% in December alone<\/strong>, consistent with a decade-long trend of softer year-end USD performance.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Technical Analysis<\/h2>\n\n\n\n<p>The US Dollar Index has slipped back below the 99.50 level, erasing some of November\u2019s gains and putting pressure on short-term bullish momentum. After peaking just under 100.80 late last month, the index has faltered at resistance and now trades around 99.09.<\/p>\n\n\n\n<p>Price has fallen beneath the 5- and 10-day moving averages, and is testing the 30-day average, signalling potential further softness if buyers don\u2019t return soon.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" src=\"https:\/\/www.vtmarkets.com\/en-ca\/wp-content\/uploads\/sites\/13\/2026\/03\/1_image-9-1024x449.jpg\" alt=\"\" class=\"wp-image-35869\" \/><\/figure>\n\n\n\n<p>The MACD has crossed bearishly below the signal line, and the histogram is trending lower, supporting a short-term downside bias. Key support lies near 98.80\u201399.00; a break below this range could open the way toward 98.00 or even 97.50.<\/p>\n\n\n\n<p>Conversely, if USDX reclaims 100 with conviction, it would invalidate the bearish signal and reassert the uptrend.<\/p>\n\n\n\n<p>For now, the bias has turned cautious, with momentum softening and technicals pointing to further consolidation or a near-term pullback unless macro catalysts revive dollar demand.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Cautious Forecast<\/h2>\n\n\n\n<p>The USDX may continue to weaken if markets lean further into U.S. rate-cut expectations. A break below <strong>99.00<\/strong> could attract more sellers, while only a firmer U.S. data surprise or hawkish Fed communication is likely to lift the dollar back toward the <strong>100.00\u2013100.50<\/strong> band in the short term.<\/p>\n\n\n\n<p><strong>Stay on top of <a href=\"https:\/\/www.vtmarkets.com\/today-analysis\/\" target=\"_blank\" rel=\"noopener\" title=\"\">market moves<\/a> on <a href=\"http:\/\/www.vtmarkets.com\/trade-now\" target=\"_blank\" rel=\"noopener\" title=\"\">VT Markets<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The U.S. dollar softened as traders positioned for deeper rate cuts into 2026, leaving the USDX under pressure. &#8211; vtmarkets.com<\/p>\n","protected":false},"author":64,"featured_media":17756,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[9,11],"class_list":["post-35868","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-analysis","tag-dollar","tag-indices"],"acf":{"acf_article_selection_author":""},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/35868","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/64"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=35868"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/35868\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17756"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=35868"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=35868"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=35868"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}