Dollar Faces Pressure Amid Rate Cut Expectations

The U.S. dollar hovers near its weakest position in nearly a week as traders speculate on two additional interest rate cuts this year. Federal Reserve Chair Jerome Powell's cautious stance on further easing has fueled these expectations, affecting the dollar's strength.

Currently, the dollar index stands at 97.230 against six major currencies, showing a 0.5% drop this week. Investors are betting on quarter-point rate reductions at the next two Fed meetings, in line with forecasts from policymakers after a recent reduction.

During a news conference, Powell highlighted the intricate task of balancing high inflation against a weakening job market, describing the policy situation as challenging. This sentiment reflects on the dollar's recent performance following the Fed's actions.

(With inputs from agencies.)