Dollar slides as rate‑cut bets grow; euro hits seven‑week high

The U.S. dollar slipped on Thursday, as fresh weak economic data strengthened market expectations that the Federal Reserve (Fed) may cut interest rates as soon as its upcoming meeting.

That prospect pushed the Euro to its strongest level in nearly seven weeks, while the Japanese Yen gained modestly — drawing some support from easing intervention concerns and market speculation around central‑bank policy.

What’s driving the moves

Investors are increasingly betting on a rate cut from the Fed next week, with data weakening confidence in the U.S. economy and boosting demand for other currencies.

Meanwhile, discussion over a potential new Fed chair — in particular Kevin Hassett, a U.S. economic adviser believed to favor aggressive rate easing — has added to investor conviction that policy will shift soon.

Some analysts caution, though, that the dollar may not fall indefinitely. Despite the near-term expectations, a strong U.S. economic backdrop could limit just how far and how fast rate cuts — and a weaker dollar — go.

Market snapshot

• The dollar index — which tracks the U.S. currency versus a basket of major currencies — dropped sharply and is now near a five‑week low.
• The euro climbed above $1.167, up more than 12 % this year — on track for its strongest annual performance since 2017.
• The yen strengthened slightly to about 154.6 per dollar amid growing speculation that the Bank of Japan might raise rates when it meets later this month.

What lies ahead