White House Economic Adviser Kevin Hassett has suggested that the Federal Reserve should consider lowering interest rates. He believes that Fed Chair Jerome Powell might support this idea. Hassett also emphasized the need to closely watch economic data, warning against the notion of sticking to a fixed six-month plan for interest rates. The US Dollar’s strength varied against major currencies. It performed particularly well against the Swiss Franc, rising 0.18%. In contrast, it saw slight declines against other currencies, losing -0.16% against the Canadian Dollar and -0.22% against the Australian Dollar.

Expert Insights on Commodities and Currencies

Agustin Wazne, a News Editor at FXStreet, shares insights on commodities and major currencies. He advises investors to conduct thorough research before making any investment choices, as market movements can be risky and unpredictable. With the White House now publicly supporting rate cuts, we can expect the Federal Reserve to adopt a more dovish attitude soon. This political stance may pressure the central bank to adjust its policies before the next FOMC meeting. Derivative markets are likely to start pricing in an increased chance of a rate cut in the first quarter of 2026. Recent economic data through November 2025 supports this view. The latest CPI report revealed that headline inflation has decreased to 2.3% year-over-year, well within the Fed’s acceptable range, especially compared to the highs seen a couple of years ago. This situation provides the Fed with a solid reason to shift from a restrictive approach to a more accommodating one. Additionally, the job market is cooling compared to 2023 and 2024. The last Non-Farm Payrolls report showed a slowdown in job growth, with the unemployment rate rising to 4.2%. This combination of lower inflation and a weakening job market reinforces the argument for the Fed to take preemptive action to prevent a more significant downturn.

Strategic Trading Approaches

For traders, this suggests a weaker US Dollar, as interest rate differences will reduce against other major currencies. It’s wise to look at options strategies that benefit from a falling dollar, such as buying call options on pairs like EUR/USD or AUD/USD. Today’s slight uptick in the dollar against the Swiss Franc seems to be a small blip in a larger trend. The main mantra is “watch the data,” implying that uncertainty around timing will lead to market volatility. This creates an ideal environment for long volatility strategies on major currency pairs or Treasury futures. Remembering the aggressive interest rate hikes of 2022-2023, preparing for the anticipated easing is now the primary concern. Create your live VT Markets account and start trading now.

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