The U.S. dollar continued to weaken on Tuesday after new manufacturing data came in below expectations. The softer numbers increased pressure on the Federal Reserve to cut interest rates at its upcoming policy meeting later this month. The U.S. dollar index, which tracks the greenback against six major currencies, slipped to 99.408 as Asian trading began. This followed a seventh straight day of losses on Monday, when the index hit a two-week low while stocks and bonds also declined.
Data released on Monday showed that U.S. manufacturing contracted for the ninth month in a row in November. The Institute for Supply Management reported that its manufacturing PMI fell to 48.2 from 48.7 in October. Measures of new orders and employment also worsened, while input prices increased due to ongoing tariff pressures.
Brian Martin, head of G3 economics at ANZ in London, noted that the figures point to slowing demand across the U.S. economy. He said the Fed should not only cut rates in December but continue easing next year. Martin also predicted an additional 50 basis points of rate cuts in 2026.
Market pricing now reflects an 88% chance of a 25-basis-point cut at the Federal Reserve’s next meeting on December 10, up from 63% one month ago, according to the CME Group’s FedWatch tool. U.S. 10-year Treasury yields rose to 4.086% following a selloff in global bond markets on Monday.
Against the yen, the dollar traded at 155.51, holding steady after comments from Bank of Japan Governor Kazuo Ueda. He said the bank would review the pros and cons of raising interest rates at its next meeting, pushing Japan’s two-year yields above 1% for the first time since 2008.
The euro traded at $1.1610, steady during Asian hours, as diplomatic efforts to end the war in Ukraine continued. European leaders expressed support for Ukrainian President Volodymyr Zelenskiy after an earlier U.S.-backed peace proposal faced criticism for favoring Russia. Meanwhile, Washington’s special envoy traveled to Moscow for continued talks.
Sterling held near $1.3216, close to its highest level in a month, after limited movement during the session. The head of the U.K.’s fiscal watchdog resigned on Monday following the accidental release of sensitive budget details before they were formally presented in parliament.
The Australian dollar traded at $0.6544 and the New Zealand dollar at $0.5727, both showing little change at the start of Asian trading.
