The US currency plunged as investors took a rate cut from the Fed for granted.
The dollar index fell to its lowest level since early January of 101.76 earlier in the session.
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The global dollar fell to its lowest level since January on expectations of a dovish stance from the United States Federal Reserve (Fed)as investors await revisions to US payrolls data on Wednesday and a speech by the Fed chairman, Jerome Powell, at the Jackson Hole economic conference in Wyoming later in the week.
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He dollar index fell 0.42% to 101.44, its lowest level since January 2, while the euro rose 0.31% to $1.1119, its highest level since Dec. 28.


Meanwhile, the pound sterling rose 0.29% to $1.3026 after hitting $1.3054, the highest level since July 2023. In addition, the greenback weakened 0.82% to $145.36 Japanese Yen a day after touching 145.20, the lowest level since August 7.
Employment data and the Fed decision
Economists of Goldman Sachs The U.S. government expects 600,000 to 1 million fewer jobs to be created between April 2023 and March 2024 than previously reported. A downward revision of 1 million jobs would mean 1.6 million jobs were created in that period, down from the 2.6 million initially reported, it said. Marc Chandler, Chief Market Strategist Bannockburn Global Forex in New York.
The prospect of a weaker labor market is why traders are still pricing in the possibility of a 50-basis-point cut in September, Chandler said, adding: “People thought the Fed was behind on raising rates, and now a lot of people think it’s behind on cutting rates.”
Traders reduced bets that the Fed would cut its reference interest rate by half a percentage point at its Sept. 17-18 meeting following higher-than-expected housing inflation and strong retail sales in July.
Source: Ambito