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On Wednesday, the U.S. dollar index (DXY00) finished down by 0.08% after reaching a 17-month low with the November MNI Chicago PMI plunging to 36.3, worse than expectations of 43.6. The dollar initially strengthened due to a surprising drop in U.S. weekly jobless claims to 216,000, the lowest in seven months, and a rise in September capital goods new orders by 0.9%, exceeding the 0.3% forecast.
Market expectations indicate an 80% probability that the Federal Open Market Committee (FOMC) will cut the fed funds target range by 25 basis points at its meeting on December 9-10. Meanwhile, speculation surrounds Kevin Hassett as a leading candidate to replace Jerome Powell as Fed Chair, who is perceived as dovish, potentially weighing further on the dollar.
In other currencies, the euro (EUR/USD) rose by 0.23% to a one-week high, influenced by comments from ECB officials, while Japanese yen (USD/JPY) gained 0.24%, supported by gains in the Nikkei Stock Index. Japan’s October machine tool orders increased by 17.1% year-over-year, the highest in over three years.
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