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The US Dollar Index (DXY), an index of the value of the US Dollar (USD) measured against a basket of six world currencies, trades on a softer note near 98.15 during the Asian trading hours. Traders brace for US economic data this month to gauge the path of interest rates. Concerns about the Federal Reserve’s (Fed) independence under the US President Donald Trump administration could undermine the US Dollar against its rivals. Traders believe Trump will name a dovish successor to Fed chair Jerome Powell, whose term ends in May, after the US President repeatedly criticized Powell last year for not cutting rates more swiftly or deeply. “We expect that concerns around central bank independence will extend into 2026, and see the upcoming change in Fed leadership as one of several reasons why risks around our Fed funds rate forecast skew dovish,” said Goldman strategists.  Financial markets are pricing in two rate cuts in the year compared to one predicted by a divided Fed. According to the CME FedWatch tool, financial markets are pricing in nearly a 15.0% probability that the US central bank will cut interest rates at its next meeting in January. The attention will shift to the key US economic data, including the US Nonfarm Payrolls (NFP) and Unemployment Rate data, which will be published next week. These reports could offer some hints about the health of the labour market and the US interest rate this year. If the US employment data show a stronger-than-expected outcome, this could help limit the DXY’s losses in the near term.  US Dollar FAQs The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded…

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Filed under: News - @ January 2, 2026 5:18 am