Dollar Slides to Multi-Month Lows as Markets Await Fed Decision

The US dollar hit significant multi-month lows against major currencies on Tuesday as markets position themselves for an anticipated Federal Reserve rate cut, highlighting mounting pressures on the American economy amid growing social and economic tensions in the US.

Market Movements and Political Pressure

The dollar index fell to 97.121, reaching its lowest point since July 7, with particularly notable declines against sterling and the euro. This movement comes as President Trump continues to challenge Fed policy, calling for more aggressive monetary easing through social media channels.

British Labour Market Shows Resilience

Sterling demonstrated particular strength, rising 0.2% to $1.3627, its highest since July 8. The British currency's performance comes despite data showing a gradual cooling in the UK labour market, which may ease the Bank of England's concerns about persistent inflation pressures.

"Until inflation convincingly cools, the BoE is stuck holding rates high, keeping pressure on growth," noted Lale Akoner, global market analyst at eToro.

European and Asian Market Dynamics

The euro demonstrated significant strength, climbing 0.3% against the dollar to $1.1797, while European economic indicators continue to influence market sentiment. Meanwhile, the Australian dollar reached $0.6677, its strongest position since November 8.

Key Points for Investors

• Markets expect a 25 basis points Fed rate cut on Wednesday
• British payroll numbers show seventh consecutive monthly decline
• Private sector wage growth in the UK slowed to 4.7%
• Japanese yen trading at 146.920 ahead of BoJ meeting