MODEL PORTFOLIO
THE GIST
NEWS AND FEATURES
Global Philippines Fine Living
INSIGHTS
INVESTMENT STRATEGY
Economy Stocks Bonds Currencies
THE BASICS
Investment Tips Explainers Retirement
WEBINARS
2024 Mid-Year Economi Briefing, economic growth in the Philippines
2024 Mid-Year Economic Briefing: Navigating the Easing Cycle
June 21, 2024
Investing with Love
Investing with Love: A Mother’s Guide to Putting Money to Work
May 15, 2024
retirement-ss-3
Investor Series: An Introduction to Estate Planning
September 1, 2023
View All Webinars
DOWNLOADS
investment-ss-3
Reports
Policy rate views: Fed expected to do baby steps
DOWNLOAD
economy-ss-9
Economic Updates
Inflation Update: Faster but full-year average within target
DOWNLOAD
948 x 535 px AdobeStock_433552847
Reports
Monthly Economic Update: Waiting on Jay Powell
DOWNLOAD
View all Reports
Metrobank.com.ph How To Sign Up
Follow us on our platforms.

How may we help you?

TOP SEARCHES
  • Where to put my investments
  • Reports about the pandemic and economy
  • Metrobank
  • Webinars
  • Economy
TRENDING ARTICLES
  • Investing for Beginners: Following your PATH
  • On government debt thresholds: How much is too much?
  • Philippines Stock Market Outlook for 2022
  • Deficit spending remains unabated

Login

Access Exclusive Content
Login to Wealth Manager
Visit us at metrobank.com.ph How To Sign Up
Access Exclusive Content Login to Wealth Manager
Search
MODEL PORTFOLIO THE GIST
NEWS AND FEATURES
Global Philippines Fine Living
INSIGHTS
INVESTMENT STRATEGY
Economy Stocks Bonds Currencies
THE BASICS
Investment Tips Explainers Retirement
WEBINARS
2024 Mid-Year Economi Briefing, economic growth in the Philippines
2024 Mid-Year Economic Briefing: Navigating the Easing Cycle
June 21, 2024
Investing with Love
Investing with Love: A Mother’s Guide to Putting Money to Work
May 15, 2024
retirement-ss-3
Investor Series: An Introduction to Estate Planning
September 1, 2023
View All Webinars
DOWNLOADS
investment-ss-3
Reports
Policy rate views: Fed expected to do baby steps
September 18, 2025 DOWNLOAD
economy-ss-9
Economic Updates
Inflation Update: Faster but full-year average within target
September 5, 2025 DOWNLOAD
948 x 535 px AdobeStock_433552847
Reports
Monthly Economic Update: Waiting on Jay Powell
September 2, 2025 DOWNLOAD
View all Reports
Currencies 4 MIN READ

Dollar headed for monthly drop on rate cut wagers

August 29, 2025By Reuters
Related Articles
Gold prices rise to over one-month high after US jobs report July 8, 2024 Dollar eases ahead of US payrolls test September 6, 2024 G3 central banks and China Politburo bonanza July 23, 2023

SINGAPORE – The dollar wobbled on Friday, poised for a 2% drop in August against major currencies on rising odds of the Federal Reserve cutting interest rates next month while worries about the threats to the US central bank’s independence linger.

President Donald Trump’s campaign to exert more influence over monetary policy, including attempts to fire Lisa Cook, one of the Fed’s governors, has weighed on the dollar. Cook filed a lawsuit claiming Trump has no power to remove her from office.

The legal battle is the latest chapter in Trump’s attempts to reshape the central bank after repeatedly criticizing the Fed and its Chair Jerome Powell for not cutting interest rates.

Currency markets started Friday tentatively, with the euro little changed at USD 1.1675, on course for a 2% gain in August. Sterling last bought USD 1.3509, and the Japanese yen fetched 146.97 per dollar.

The Australian dollar was steady at USD 0.6533, set for a 1.6% gain in the month.

The dollar index, which measures the US currency against six major peers, was at 97.917, on course for a 2% decline in the month. The index is down nearly 10% this year as erratic US trade policies drove investors towards alternative assets.

“While President Trump may be able to lower the Fed Funds rate by influencing the makeup of the interest rate setting committee, longer-term interest rates may not respond in kind,” said Carol Kong, currency strategist at Commonwealth Bank of Australia.

“If markets perceive the FOMC’s independence as compromised, inflation expectations could become unanchored, driving long term interest rates higher.”

Trump’s push to place hand-picked, dovish-leaning candidates on the central bank’s decision-making committee has pressured short-term yields lower, while the longer term yields have risen.

A politically influenced Fed that keeps interest rates lower than they otherwise might could result in higher inflation and reduce foreign demand for the debt due to credibility fears, while a worsening fiscal outlook is also expected to weigh on longer-dated bonds.

The yield curve between two-year and 10-year notes was last at 57 basis points, after hitting their steepest level since April earlier in the week.

Still, market reaction to the battle between Trump and the Fed’s Cook has been relatively muted with slight dollar selling and curve steepening.

“The market is looking through the amplified theatre and noise with regard to the robust opinions circulating regarding the independence of the US Fed,” said George Boubouras, head of research at K2 Asset Management.

“The market is not complacent about these developments, it is simply being pragmatic.”

RATE CUT WAGERS

Federal Reserve Governor Christopher Waller said on Thursday he wants to start cutting rates next month and “fully expects” more rate cuts to follow to bring the Fed’s policy rate closer to a neutral setting.

Markets are currently pricing in an 86% chance of a rate cut in September, up from 63% a month earlier, CME FedWatch showed. Traders are wagering on over 100 basis points of easing by June next year.

Data on Thursday showed the US economy grew faster than initially thought in the second quarter, but tariffs on imports continued to cloud the picture.

Investors will parse through the PCE price index report, the Fed’s preferred inflation measure, later on Friday. On a year-over-year basis, headline PCE inflation is estimated at 2.6%, after rising at the same rate in June.

While a reading of 3% or higher will raise eyebrows after the Fed’s dovish pivot, the key data remains next Friday’s labour market report ahead of the September FOMC meeting, said Tony Sycamore, market analyst at IG.

(Reporting by Ankur Banerjee in Singapore; Editing by Shri Navaratnam)

 

This article originally appeared on reuters.com

Read More Articles About:
Worldwide News Philippine News Rates & Bonds Equities Economy Investment Tips Fine Living

You are leaving Metrobank Wealth Insights

Please be aware that the external site policies may differ from our website Terms And Conditions and Privacy Policy. The next site will be opened in a new browser window or tab.

Cancel Proceed
Get in Touch

For inquiries, please call our Metrobank Contact Center at (02) 88-700-700 (domestic toll-free 1-800-1888-5775) or send an e-mail to customercare@metrobank.com.ph

Metrobank is regulated by the Bangko Sentral ng Pilipinas
Website: https://www.bsp.gov.ph

Quick Links
The Gist Webinars Wealth Manager Explainers
Markets
Currencies Rates & Bonds Equities Economy
Wealth
Investment Tips Fine Living Retirement
Portfolio Picks
Bonds Stocks
Others
Contact Us Privacy Statement Terms of Use
© 2025 Metrobank. All rights reserved.

Access this content:

If you are an existing investor, log in first to your Metrobank Wealth Manager account. ​

If you wish to start your wealth journey with us, click the “How To Sign Up” button. ​

Login HOW TO SIGN UP