The U.S. dollar is heading toward its worst weekly drop since late July. Traders are betting more heavily on another rate cut next month, and the Thanksgiving holiday has also slowed market activity, adding to the pressure.
The dollar index—which tracks the dollar against six major currencies—ticked up just 0.1% to 99.624 after five straight days of losses. Meanwhile, expectations for a December rate cut have jumped sharply. According to the CME FedWatch tool, there’s now an 87% chance the Federal Reserve will cut rates by 25 basis points at its December 10 meeting. That’s a huge leap from 39% just a week ago.
In the bond market, the 10-year Treasury yield rose slightly by 0.8 basis points to 4.0037%, snapping its five-day slide.
Over in Asia, the Japanese yen moved back and forth after Tokyo’s inflation data came in hotter than expected. Prices rose 2.8% in November, staying above the Bank of Japan’s 2% target.
The euro stayed steady at $1.1600, while the British pound slipped 0.1% to $1.323—though it’s still set for its best week since August.
The Australian dollar inched up to $0.6536, the Chinese yuan held firm at 7.074 per dollar, and the New Zealand dollar dipped to $0.5725 after posting its strongest weekly gain since late April.
