The US dollar was in decline today and is expected to have its biggest annual decline since 2017, Reuters reported.
Further declines are also possible as investors expect the US Federal Reserve to have room to cut interest rates further next year, even as most of its rivals are likely to have finished cutting.
Not even a solid reading of US gross domestic product (GDP) has changed the outlook for interest rates, with investors anticipating roughly two more Fed rate cuts in 2026.
“We expect the Fed to agree to two more cuts of 25 basis points to 3.00 to 3.25 percent, but we think the risks are down,” Goldman Sachs chief U.S. economist David Mericle said, citing slowing inflation as a reason for the forecast.
The euro and the pound rose to new three-month highs today, although they were mostly unchanged at $1.180 and $1.3522 in recent days, SEEbiz reports.
The US currency was on track to lose 9.8 percent for the year, which would mark its biggest annual decline since 2017.
Any further weakness in the final week of the year would see it fall to its highest level since 2003.
The dollar has had a tumultuous year, weighed down by US President Donald Trump’s chaotic tariffs that sparked a crisis of confidence in US assets earlier this year, while Trump’s growing influence over the Fed has also raised concerns about the central bank’s independence.
