FX.co ★ Dollar Subdued on Dovish Fed Signals

The dollar index remained stable around the 100 mark on Tuesday, marking the fourth consecutive session of little movement. This steadiness comes amid dovish statements from Federal Reserve officials, reinforcing expectations for a potential interest rate cut in the near future. Fed Governor Christopher Waller expressed support for a cut in December, citing increasing risks in the labor market. His views align with recent comments from San Francisco Fed President Mary Daly and New York Fed President John Williams. Waller also highlighted that policy decisions next year will be significantly influenced by delayed data due to the government shutdown. Currently, markets anticipate an 81% likelihood of a 25 basis point rate reduction next month, a significant jump from the 42.4% probability noted last week. Investors are now focused on upcoming U.S. economic data releases for further insights, including reports on retail sales, the producer price index, durable goods orders, and weekly jobless claims. The dollar held steady, with a slight weakening trend against other major currencies.