Dollar fell in European trade on Thursday against a basket of major rivals on track for the fifth profit in a row, plumbing five-month lows amid strong prospects the Federal Reserve will start cutting interest rates next March.
Now traders prepare to evaluate such odds later today with US unemployment claims releasing later today, which will provide clues on the state of the US labor sector.
The Index
The dollar index fell over 0.3% to 100.62 to July 27, with a session-high at 100.95, after losing 0.5% on Wednesday, the fourth loss in a row as US 10-year treasury yields declined.
US 10-year treasury yields fell to 3.783%, a five-month low, hurting investments in the dollar.
Aggressive Selloff
Dollar is facing a selloff after the Federal Reserve took a decidedly bearish stance at the December policy meeting, paving the way for early interest rate cuts in 2024.
A string of US data showed that inflation is slowing down, in turn reducing pressures on the Fed.
Recent US consumer spending showed the slowest pace since March 2021.
US rates
Current pricing for a US interest rate cut at the Fed March meeting stood at 87%, while pricing for such a cut at the May meeting stood at 99.5%.
US Unemployment Claims
Now investors await important US unemployment claims data, expected 211 thousand in the week ending December 23, up from 205 thousand in the previous reading.
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