U.S Dollar Declines on “Potential Fed Chair’ Comment
The US dollar weakened against trading pairs in the forex market as expectations that the Federal Reserve will axe rates next week increased and ‘potential Fed Chair comment’ by President Donald Trump.
The European single currency, the euro, the British pound, and Japanese Yen climbed against the greenback as the market sold off US dollar ahead of the Fed meeting.
The dollar index weakness accelerated after President Donald Trump signalled that Kevin Hassett, his National Economic Council director, is now the clear frontrunner to replace Jerome Powell.
In reaction, forex traders have started to price in the US Fed leadership change, with the US dollar maintaining a downward trend against its trading partners on Wednesday.
The dollar has been under pressure for several weeks as expectations for a December rate cut have rebuilt following a series of dovish Fed comments.
The dollar has been sold off heavily, and it is consolidating in narrow ranges with a slightly firmer bias today. After falling for the past six sessions, the Dollar Index looks a bit stretched, and the backing up of US yields appear lending it support near the November low near 99.00.
Dollar index has been impacted by the growing belief that Hassett will be nominated to succeed Chair Powell at the Federal Reserve. Sterling, meanwhile, has held on to its post-budget gains but still has UK data and the December BoE meeting to navigate.
During a Cabinet meeting, Trump said, “A potential Fed chair is here too,” gesturing toward Hassett. Prediction markets reacted immediately, with Kalshi pricing an 83 percent probability of Hassett’s confirmation, up from 75 percent last week.
Hassett’s views are seen as most closely aligned with those of Trump, who has repeatedly called for rate cuts, ING analyst Chris Turner says in a note. The market’s response to the news is a weaker dollar, a faster fall of short-end yields than long-end yields and a rally in risky assets.
US Jobless Claims have moved down to their lowest levels since August, indicating fewer people filing for unemployment insurance.
While the labor market has undoubtedly been cooling, this is a good sign. In a recession, this number would be trending higher. US Rents were down 1.1% over the last year, the 30th consecutive month with a YoY decline.
Economic activity in the services sector continued to expand in November, say the nation’s purchasing and supply executives in the latest ISM® Services PMI® Report.
The Services PMI® registered at 52.6 percent and is in expansion territory for the ninth time in 2025. “In November, the Services PMI® registered a reading of 52.6 percent, 0.2 percentage point higher than the October figure of 52.4 percent.
The Business Activity Index continued in expansion territory in November, registering 54.5 percent, 0.2 percentage point higher than the reading of 54.3 percent recorded in October.
The New Orders Index also remained in expansion in November, with a reading of 52.9 percent, 3.3 percentage points below October’s figure of 56.2 percent but 0.9 percentage point above its 12-month average of 51.7 percent.
The Employment Index contracted for the sixth month in a row with a reading of 48.9 percent, a 0.7-percentage point improvement from the 48.2 percent recorded in October — the fourth consecutive monthly increase since a reading of 46.4 percent in July.
The Prices Index registered 65.4 percent in November, its lowest reading since hitting 65.1 percent in April 2025. The November figure was a 4.6-percentage point drop from October’s reading of 70 percent. The index has exceeded 60 percent for 12 straight months. Guinness Nigeria Sees Strong Repricing in Fresh Rally
