The US Dollar (USD) enters December under pressure, with markets heavily pricing in a Fed rate cut next week amid a softer labor market and the scheduled end of quantitative tightening, DBS’ Senior FX Strategist Philip Wee notes.
USD eyes year-end weakness ahead of FOMC
« The USD is entering the final month of 2025 with heavy expectations that the Fed will cut interest rates at next week’s FOMC meeting on December 10. »
« US Labor Secretary Lori Chavez-DeRemer, Fed Presidents John Williams (New York) and Mary Daly (San Francisco) judged that the risks from a softening labor market outweighed the rationale for holding rates high for longer amid weaker demand and tightening credit conditions. »
« The Fed is also scheduled to end quantitative tightening on December 1 by reinvesting maturing securities instead of letting them roll off. »
