USD weakens as Gundlach expects two Fed rate cuts in 2025
The US Dollar Index (DXY) declined 0.43% during Monday's session, extending Friday's losses as prominent bond investor Jeffrey Gundlach maintained his forecast for two Federal Reserve rate cuts this year. Speaking on CNBC, the DoubleLine Capital CEO characterized Fed Chair Powell's recent press conference as 'quite hawkish' but noted that two-year Treasury yields are already pricing in rate cuts. Market sentiment shifted following Friday's disappointing US payroll and ISM manufacturing data, which strengthened expectations for potential Fed easing as early as next month. Gundlach also addressed speculation about Powell's tenure, suggesting any resignation would likely trigger an immediate rate cut. The dollar's weakness benefited major pairs, with EUR/USD gaining ground above 1.0850 and GBP/USD pushing toward 1.2750. Traders are closely monitoring upcoming economic releases for further clues on the Fed's policy trajectory, with immediate support for the DXY at 103.50.
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