Forex Latest Market News: Anticipation of Fed Rate Cut Drives Dollar Lower
Estimated reading time: 3 minutes
- Weaker-than-expected US jobs data intensifies dovish sentiment
- 100% probability of a Fed rate cut in September is priced into the market
- Weakening US dollar and strengthening Canadian and British pounds
- Low volatility, but a surge is expected this week
- Key data releases and Fed announcements to watch
Contents
- Forex Latest Market News: Anticipation of Fed Rate Cut Drives Dollar Lower
- Weaker-Than-Expected US Jobs Data Intensifies Dovish Sentiment
- What to Watch Next
Weaker-Than-Expected US Jobs Data Intensifies Dovish Sentiment
The anticipation of a Federal Reserve rate cut in September is the most significant development in the forex markets over the past 12 hours. Following last week’s weaker-than-expected US jobs data, market sentiment has shifted decisively dovish, putting sustained downward pressure on the US dollar. This shift is driving trader positioning ahead of crucial US inflation data releases and the upcoming Fed policy announcement later this week. The reaction unfolded at the end of last week and continued through the weekend, setting the tone overnight into Sunday, September 14, 2025 (UTC).
The weaker-than-forecast US employment figures solidified market conviction that the Federal Reserve will cut interest rates at its September meeting. Market pricing now shows a 100% probability of a rate cut in September, an 80% probability for October, and a 73% probability for December, with some analysts anticipating a 0.50% reduction. Weekly Forex Forecast Pairs in Focus
This development has involved currency investors, the Federal Reserve, and broader G10 forex markets. The weakening US dollar has been accompanied by relative strength in currencies like the Canadian and British pounds. Weekly Forex Forecast TeleTrade Market News Pairs in Focus
The market impact has been multifaceted. The US dollar has experienced persistent downward pressure, reflecting the heightened expectations of a more dovish Federal Reserve. Major currency pairs like EUR/USD and GBP/USD have shown consolidation near recent ranges, as traders await further clarity from upcoming US inflation data and the subsequent Fed policy announcements. Despite the significant shift in expectations, volatility in major currency pairs has remained historically low, although a surge in volatility is anticipated this week as the US releases CPI and other crucial economic data. Weekly Forex Forecast Pairs in Focus
The analysis presented here is synthesized from DailyForex, a platform that aggregates news and market data from reputable sources such as Bloomberg and Reuters. Weekly Forex Forecast Pairs in Focus This aggregation provides a highly reliable overview of the current market sentiment and anticipated movements.
What to Watch Next
- The release of US inflation data this week.
- The Federal Reserve’s policy announcement later this week.
- The subsequent market reaction and volatility in major currency pairs.
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