The dollar fell today after data on manufacturing activity in the world's largest economy showed weaker-than-expected performance, increasing pressure on the US Federal Reserve to cut interest rates at its monetary policy meeting later this month. The dollar index, which measures the performance of the US currency against six major currencies, fell to 99.408 at the start of the Asian trading session after declining on Monday for the seventh consecutive session. During American trading hours, the index hit a two-week low as stocks and bonds fell. Data released on Monday showed that the US manufacturing sector contracted for the ninth consecutive month in November. The Institute for Supply Management (ISM) Manufacturing Purchasing Managers' Index (PMI) fell to 48.2 in November from 48.7 in the prior month. "For me, it all points to a slowdown in demand in the economy," said Brian Martin, head of economics at ANZ Bank in London. He added, "I really think the Fed needs to cut interest rates not only in December but to continue cutting next year," noting that he expects further cuts of 50 basis points in 2026. The CME Group's Fed Watch tool shows that markets are pricing in an 88% chance that the Fed will cut interest rates by 25 basis points at its next meeting on December 10, compared to 63% a month ago. The dollar was trading at 155.51 yen, little changed from late US trading session levels, after Bank of Japan Governor Kazuo Ueda said on Monday that the bank would consider the pros and cons of raising interest rates at its next monetary policy meeting. This caused the yield on Japanese two-year government bonds to rise above 1% for the first time since 2008. The euro stabilized at $1.1610 amid ongoing talks to end the war in Ukraine. The British pound was trading at $1.3216, near a one-month high, but has not seen significant changes so far during the day.
