US Dollar Dips on Fed Rate Cut Bets, Trump Pressure

The U.S. dollar has weakened against major currencies like the euro and yen amid growing speculation that the Federal Reserve will cut interest rates next month, following signals from New York Fed Chief John Williams. President Donald Trump's intensified efforts to influence monetary policy, including his attempt to remove Fed Governor Lisa Cook—who has filed a lawsuit challenging her dismissal—have added to market uncertainty and pressure on the currency. Despite some positive economic data, such as improving jobless claims and slightly higher GDP growth, concerns about Fed independence and geopolitical factors, including rising tariffs in India and potential National Guard deployments in U.S. cities, continue to weigh on investor sentiment. The market currently prices in an 87.3% chance of a quarter-point rate cut, with key data releases like the PCE price index and payroll reports expected to influence the Fed's decision. The dollar's decline also reflects broader global dynamics, including the euro's gains despite political instability in France and the dollar's lowest level against China's offshore yuan since last November. Analysts note that Trump's strategy to install dovish-leaning Fed candidates is shaping expectations for more accommodative monetary policy ahead.