USD weakens on Fed rate cut hopes amid soft jobs data expectations

The US Dollar Index has declined 0.4% to 101.50 as markets increasingly price in Federal Reserve rate cuts, with traders anticipating softer annual jobs data revision. Current Fed funds futures indicate a 75% probability of a 25 basis point cut at the September FOMC meeting, up from 60% last week. Markets are particularly focused on the upcoming annual benchmark revision to employment data, which could show significantly lower job creation than initially reported. The dollar's weakness has been broad-based, with EUR/USD rising to 1.1120 and GBP/USD advancing to 1.3180. Technical indicators suggest the DXY faces strong resistance at 102.00, while support emerges at 101.20. A dovish Fed pivot combined with weaker employment data could accelerate dollar selling pressure, potentially pushing the index toward the 100.50 support zone in coming sessions.