The dollar index climbed toward 100 on Tuesday, hovering at three-month highs as Federal Reserve officials signaled caution over further interest rate cuts, prompting traders to trim expectations for additional easing. Fed Governor Lisa Cook acknowledged growing risks in the labor market but stopped short of backing a December cut, while Chicago Fed President Austan Goolsbee said inflation remains his primary concern. Their remarks followed last week’s rate cut, after which Fed Chair Jerome Powell warned that another move in December is not assured. Markets now see about a 65% chance of an additional cut next month, down from 94% a week earlier. Meanwhile, the latest ISM Manufacturing PMI showed a deeper-than-expected contraction and softer price pressures. Investors are now awaiting the ADP employment and Challenger job cuts reports for fresh insights into labor market conditions. The dollar strengthened across the board, hitting fresh multi-month highs against most major currencies.
