The US dollar edged below 98 on Monday, trading sideways near its lowest level since early October as holiday-thinned trading continued and markets priced in rate cuts next year. Investors still factor in two more rate cuts in 2026, though Federal Reserve officials are split on the path forward, with the majority forecasting just a single additional reduction. Markets will also watch for the new Fed Chair, with President Trump set to announce Powell’s successor in early 2026, a move likely to influence the rate-cut outlook. Traders now turn to the FOMC minutes, due Tuesday, for further guidance on monetary policy. The dollar is on track for an annual loss of more than 9% in 2025, its steepest decline since 2017, pressured by Trump’s aggressive tariff policies and threats to Fed independence.
