Dollar Under Pressure Amid Fed Rate Cut Speculation

The dollar showed little movement on Thursday as traders speculated on a potential Federal Reserve interest rate cut next month. This comes in the wake of New York Fed Chief John Williams suggesting a possible reduction. The U.S. currency faces pressure from President Trump's intensified efforts to influence monetary policy, particularly his attempt to replace Fed Governor Lisa Cook with a loyalist.

Despite an unexpected confidence vote announcement by France's Prime Minister, the dollar remained steady against the euro. Fed's Williams indicated in a CNBC interview that interest rates might fall but emphasized the need to assess upcoming economic data before the September 16-17 meeting. Key data includes the PCE price index and the monthly payrolls report due soon.

The speculations have impacted short-term Treasury yields, driving them to a low not seen since May. President Trump's strategy of appointing dovish-leaning candidates to the Fed's committee has further influenced market expectations. Meanwhile, Japan postponed a major investment announcement in the U.S., reflecting ongoing negotiations.

(With inputs from agencies.)