Synopsis: The dollar index fell to a seven-week low following the Federal Reserve’s third consecutive rate cut. Policymakers projected just one cut in 2025, signaling a cautious approach. Let’s dive into how this decision affected other currencies.

The dollar index fell to its lowest level in nearly seven weeks after the Federal Reserve cut interest rates in December. This marked the Fed’s third consecutive reduction since September, signalling a continued shift toward looser monetary policy.

The US dollar weakened against major currencies, including the euro and the yen. The dollar index, which tracks the U.S. currency against a basket of peers, traded at 98.62, down 0.17% and hovering at its weakest point in almost seven weeks.

The Federal Reserve lowered the federal funds rate by 2

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