The US dollar index fluctuated near a two-month low around 98.3 on Friday and appeared poised for a third consecutive week of decline. This weakness came after the Federal Reserve cut interest rates as expected, but with a less aggressive tone than the market had hoped. Fed Chairman Jerome Powell signaled that additional rate hikes were almost certainly unlikely, and official projections indicated only one cut next year.

The Fed also announced plans to purchase short-term Treasury debt to maintain market liquidity. This move kept US bond yields low and automatically added pressure on the dollar. At the same time, data showed initial jobless claims rose by the most in nearly four and a half years, reinforcing the view that future interest rates will tend to be more "soft" and far from hawkish.

Meanwhile, several other major economies, such as Australia, Canada, and the eurozone, have experienced more aggressive price adjustments and policy expectations. This difference in policy direction and pace makes the US dollar less attractive compared to other currencies. As a result, the dollar is expected to weaken against most major currencies this week, with the sharpest decline projected against the euro. (az)

Source: Newsmaker.id