As of the December 1 trading session, the USD continues to weaken, as investors are almost certain that the US Federal Reserve (Fed) will cut interest rates in December. According to the CME FedWatch tool, the probability of the market valuing the 25 basis point cut has reached 87%.
The decline of the USD is further pressured by the news that White House Economic Advisor Kevin Hassett is emerging as the leading candidate to succeed Chairman Jerome Powell. Analysts believe that a person with a puppet trend like Hassett could promote a monetary policy easing cycle next year.
As a result, the USD Index measuring the strength of the greenback against the basket of major currencies moved sideways around 99.45 points, after losing 0.7% last week - the week with the strongest decline in 4 months.
Meanwhile, the Euro rose to $1.16155, a two-week high and the British pound reached $1.3225.2, recording the strongest week increase in more than three months after British Finance Minister Rachel Reeves announced a new budget, creating a psychological boost in the European market.
US Treasury Secretary Scott Bessent revealed that President Donald Trump may announce Powell's successor before Christmas. Investors believe that this will be an important turning point, shaping US monetary policy in 2026.
With the December Fed meeting almost reflecting the possibility of a 25 basis point cut, the upcoming focus will be on the early 2026 sessions, Goldman Sachs experts said. Internal division of the Commission has left the puppet trend un thefied, but with the large amount of labor data released before the January meeting, the market may be underestimating the possibility of the Fed continuing to ease in the first quarter.
