US Dollar Index struggles above 98 as investors expect more rate cuts in 2026 than Fed

US Dollar Price This week

The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the Swiss Franc.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.76%	-0.48%	0.28%	-0.41%	-0.41%	-0.67%	-1.15%
EUR	0.76%		0.32%	1.10%	0.41%	0.41%	0.15%	-0.34%
GBP	0.48%	-0.32%		0.79%	0.09%	0.08%	-0.18%	-0.67%
JPY	-0.28%	-1.10%	-0.79%		-0.68%	-0.68%	-0.93%	-1.40%
CAD	0.41%	-0.41%	-0.09%	0.68%		0.00%	-0.26%	-0.75%
AUD	0.41%	-0.41%	-0.08%	0.68%	-0.00%		-0.26%	-0.75%
NZD	0.67%	-0.15%	0.18%	0.93%	0.26%	0.26%		-0.49%
CHF	1.15%	0.34%	0.67%	1.40%	0.75%	0.75%	0.49%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

According to the CME FedWatch tool, there is a 58% chance that the Fed will cut borrowing rates atleast two times through October 2026. On the contrary, the Fed’s dot plot showed that officials see the Federal Fund Rate sliding to 3.4% by the end of 2026, suggesting that there will be one interest rate cut next year.

Meanwhile, United States (US) President Donald Trump has called the need of more interest rate cuts after the 25-basis points (bps) reduction on Wednesday. “I know there was a quarter-point reduction this past week, and the President was pleased to see that, but he thinks more should be done," White House spokeswoman Karoline Leavitt told reporters on Thursday, Reuters reported.

Going forward, the major trigger for the US Dollar will be the US Nonfarm Payrolls (NFP) data for November, which will be released on Tuesday. On the same day, investors will also focus on the Retail Sales data for November and preliminary S&P Global Purchasing Managers’ Index (PMI) data for December.

Investors will closely monitor the employment data to get cues about the current status of labour demand. On Wednesday.

Fed FAQs

What does the Federal Reserve do, how does it impact the US Dollar?

Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback.

How often does the Fed hold monetary policy meetings?

The Federal Reserve (Fed) holds eight policy meetings a year, where the Federal Open Market Committee (FOMC) assesses economic conditions and makes monetary policy decisions. The FOMC is attended by twelve Fed officials – the seven members of the Board of Governors, the president of the Federal Reserve Bank of New York, and four of the remaining eleven regional Reserve Bank presidents, who serve one-year terms on a rotating basis.

What is Quantitative Easing (QE) and how does it impact USD?

In extreme situations, the Federal Reserve may resort to a policy named Quantitative Easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used during crises or when inflation is extremely low. It was the Fed’s weapon of choice during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy high grade bonds from financial institutions. QE usually weakens the US Dollar.

What is Quantitative Tightening (QT) and how does it impact the US Dollar?

Quantitative tightening (QT) is the reverse process of QE, whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing, to purchase new bonds. It is usually positive for the value of the US Dollar.