{"id":36072,"date":"2025-12-05T10:32:39","date_gmt":"2025-12-05T02:32:39","guid":{"rendered":"https:\/\/www.vtmarkets.com\/?p=36072"},"modified":"2025-12-05T10:32:39","modified_gmt":"2025-12-05T02:32:39","slug":"dollar-index-slips-as-rate-cut-bets-firm-up","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.com\/en-ca\/analysis\/dollar-index-slips-as-rate-cut-bets-firm-up\/","title":{"rendered":"Dollar Index Slips as Rate Cut Bets Firm Up"},"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-2025-10-13T133508917-1024x559.png\" alt=\"\" class=\"wp-image-32046\" \/><\/figure>\n\n\n\n<p><strong>Key Points<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>USDX hovers at 98.951<\/strong>, set for its <strong>second consecutive weekly loss<\/strong>.<\/li>\n\n\n\n<li>Markets now price in an <strong>87% chance<\/strong> of a <strong>25 bps Fed rate cut<\/strong> next week.<\/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 US dollar index (USDX) traded at <strong>98.951<\/strong> on Friday, holding below the 99 mark as sentiment around Federal Reserve policy continued to shift dovishly.<\/p>\n\n\n\n<p>The greenback is on track for its second consecutive weekly decline, retreating from mid-November highs near 100.60.<\/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\">The dollar just had its worst day since October as weak US jobs data ramps up expectations for a Fed rate cut next week. Listen to the Morning Bid podcast to find out why markets are on edge <a href=\"https:\/\/t.co\/uslYVBL59D\">https:\/\/t.co\/uslYVBL59D<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1996561130043424993?ref_src=twsrc%5Etfw\">December 4, 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 have now fully priced in a <strong>25 basis point cut at the Fed\u2019s upcoming December meeting<\/strong>, with <strong>an 87% probability<\/strong> according to Fed funds futures.<\/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\">Economists double down on December Fed cut despite policymaker divide: Reuters poll <a href=\"https:\/\/t.co\/6WFc8ID3Sn\">https:\/\/t.co\/6WFc8ID3Sn<\/a> <a href=\"https:\/\/t.co\/6WFc8ID3Sn\">https:\/\/t.co\/6WFc8ID3Sn<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1996732525268361324?ref_src=twsrc%5Etfw\">December 5, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>Traders are also positioning for <strong>two to three more cuts across 2026<\/strong>, spurred by weakening inflation and a softer labour outlook.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Hassett Speculation Builds<\/h2>\n\n\n\n<p>Adding to the pressure on the dollar, markets are increasingly factoring in a possible leadership transition at the Fed. Economic adviser <strong>Kevin Hassett<\/strong> is reportedly the frontrunner to replace Jerome Powell when his term ends in May.<\/p>\n\n\n\n<p>Hassett is known for advocating more proactive rate cuts to support economic expansion, particularly in election years.<\/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\">Market doubts Hassett can deliver at Fed: Top fund manager <a href=\"https:\/\/t.co\/OQ3zsyiTXp\">https:\/\/t.co\/OQ3zsyiTXp<\/a> via <a href=\"https:\/\/twitter.com\/business?ref_src=twsrc%5Etfw\">@business<\/a><\/p>&mdash; Yahoo Finance (@YahooFinance) <a href=\"https:\/\/twitter.com\/YahooFinance\/status\/1996542793511309437?ref_src=twsrc%5Etfw\">December 4, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>If appointed, traders believe Hassett\u2019s dovish leanings could further accelerate policy easing \u2014 a prospect that has already started weighing on long-dollar positions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Jobs Data Mixed Ahead of PCE Inflation Print<\/h2>\n\n\n\n<p>Thursday\u2019s economic data painted a conflicting picture. Initial jobless claims unexpectedly dropped to a <strong>three-year low<\/strong>, but the decline is widely attributed to seasonal noise around the <strong>Thanksgiving period<\/strong>.<\/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\">New US unemployment claims dropped to 191,000, a more than three-year low, beating expectations and suggesting a steadier labor market than other data ahead of a Fed meeting where rate cuts are under debate <a href=\"https:\/\/t.co\/J2evgGgcUD\">https:\/\/t.co\/J2evgGgcUD<\/a> <a href=\"https:\/\/t.co\/hyYUyXrqby\">pic.twitter.com\/hyYUyXrqby<\/a><\/p>&mdash; Reuters (@Reuters) <a href=\"https:\/\/twitter.com\/Reuters\/status\/1996735017431728149?ref_src=twsrc%5Etfw\">December 5, 2025<\/a><\/blockquote><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script>\n<\/div><\/figure>\n\n\n\n<p>In contrast, the <strong>Challenger job cuts report<\/strong> showed that <strong>layoffs climbed to 71,321 in November<\/strong>, the highest reading for that month since 2022 \u2014 a reminder that labour market fragility still lingers.<\/p>\n\n\n\n<p>Markets are now looking to the <strong>delayed September PCE index<\/strong>, the Fed\u2019s preferred inflation gauge, due later today. Alongside it, <strong>consumer spending and income data<\/strong> could shed light on household demand and future policy paths.<\/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 edged lower to <strong>98.951<\/strong>, continuing its mild retreat after failing to break above the 100.80 resistance in mid-November.<\/p>\n\n\n\n<p>Price action is now back below the 5- and 10-day moving averages and testing the 30-day MA from above, hinting at a potential breakdown of short-term support. The broader uptrend from the September low at <strong>95.819<\/strong> remains intact for now, but momentum is weakening.<\/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\/image-11-1024x445.jpg\" alt=\"\" class=\"wp-image-36073\" \/><\/figure>\n\n\n\n<p>The MACD has dipped below the signal line and is heading toward the zero level, confirming a bearish shift in momentum. The histogram also shows increasing red bars, suggesting downside pressure is building.<\/p>\n\n\n\n<p>If price breaks cleanly below the <strong>98.80<\/strong> region, the next support area lies around <strong>98.20<\/strong>, followed by <strong>97.50<\/strong>. On the upside, a recovery above <strong>99.50\u201399.80<\/strong> would be needed to restore bullish confidence and open the door for another push toward 101.<\/p>\n\n\n\n<p>For now, the bias leans cautiously bearish, with traders watching for a confirmed close below the 30-day moving average as a trigger for further downside.<\/p>\n\n\n\n<h2 class=\"wp-block-heading has-medium-font-size\">Cautious Forecast<\/h2>\n\n\n\n<p>Unless the upcoming PCE reading surprises to the upside, the dollar may remain heavy into the weekend. A sustained close below <strong>99.00<\/strong> could deepen downside pressure toward the <strong>98.30\u201397.80 range<\/strong>.<\/p>\n\n\n\n<p>However, any signs of inflation stickiness or reduced rate cut pricing could prompt a short-covering rally back to <strong>99.70<\/strong>.<\/p>\n\n\n\n<p><strong>Learn more about trading <a href=\"https:\/\/www.vtmarkets.com\/indices\/\" target=\"_blank\" rel=\"noopener\" title=\"\">Indices<\/a> on <a href=\"https:\/\/www.vtmarkets.com\/trade-now\/\" target=\"_blank\" rel=\"noopener\" title=\"\">VT Markets<\/a>.<\/strong><\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The US dollar drifted lower on Friday as markets fully priced in a December rate cut and speculated on the Fed\u2019s future leadership. &#8211; vtmarkets.com<\/p>\n","protected":false},"author":64,"featured_media":32046,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[31],"tags":[9,11],"class_list":["post-36072","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\/36072","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=36072"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/36072\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/32046"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=36072"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=36072"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=36072"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}