The U.S. dollar index, which tracks the dollar's value against six major currencies, is trading just above 97.80, attempting to recover recent losses but so far with little success. Recent disappointing U.S. macroeconomic data — including the July NonFarm Payrolls report, which showed signs of labor market weakness — combined with growing expectations that the Federal Reserve will soon cut rates, continue to put pressure on the dollar.

According to the CME Group's FedWatch tool, the probability of a Fed rate cut in September is now close to 100%, with at least two cuts expected before the end of the year. These expectations were reinforced by Tuesday's U.S. consumer inflation data, which were broadly in line with forecasts. In addition, the July NonFarm Payrolls report highlighted labor market weakness, further increasing the need for monetary policy easing.

U.S. President Donald Trump has stepped up pressure on Fed Chair Jerome Powell by calling for rate cuts. U.S. Treasury Secretary Scott Bessent stated that the Fed should consider lowering rates by 50 basis points next month.

Meanwhile, Chicago Fed President Austan Goolsbee noted that he is more concerned about last month's increase in core inflation than the weak jobs report, expressing skepticism about the need for a September rate cut. Similarly, Atlanta Fed President Raphael Bostic acknowledged the labor market slowdown and possible structural changes due to tariff measures but refrained from commenting on rate cuts.

President Trump also shared his own calculations, suggesting that the Fed's interest rate should be around 1%. He stressed the need for a 3–4 percentage point reduction, while noting that interest rates are merely "paper" figures.

U.S. Treasury yields remain low as investors assess the potential impact of higher tariffs on the economy and await the release of the Producer Price Index (PPI) later during the North American trading session.

From a technical perspective, the drop below the 100-SMA and 200-SMA on the 4-hour chart favors sellers, especially as oscillators on the same chart remain negative. Support is seen at 97.60; a move below this level could accelerate the decline toward the 97.00 round level. On the upside, the nearest resistance is now at the 200-SMA at the 98.00 round level. A breakout above this level would open the way toward the 100-SMA, and beyond that, buyers could start to gain the upper hand. It is also worth noting that oscillators on the daily chart are mixed, indicating that prices are not yet ready for a major downtrend.