Dollar Sinks Amid Fed Rate Cut Speculations and Trump Pressure

The dollar faced significant challenges as market players wagered on a potential Federal Reserve interest rate cut next month. This was spurred by comments from New York Fed chief John Williams, who hinted at such a possibility. President Donald Trump's campaign to influence monetary policies further pressured the U.S. currency, with efforts to remove Fed Governor Lisa Cook adding to the tumult.

Across the currency markets, the dollar remained on the defensive against the euro, even as France's unexpected political developments unfolded. The dollar index, which tracks the U.S. currency against major counterparts, held steady despite recent declines.

Additionally, Japan's last-minute decision to cancel a pivotal trade-related trip to Washington delayed announcements on a significant investment pledge, reflecting underlying tensions. Meanwhile, Fed-related data releases are awaited with bated breath, influencing rate cut predictions and impacting Treasury yields.

(With inputs from agencies.)