US Dollar Strengthens Slightly Amid Thanksgiving Atmosphere

The US Dollar Index (DXY) moved slightly higher to the 99.60 area during the Asian session on Friday (November 28). The lack of market activity ahead of the Thanksgiving holiday helped ease selling pressure on the greenback, although the shadow of a potential rate cut by The Fed remains a major burden.

Since Tuesday, the US Dollar has been under pressure after several Federal Reserve officials gave signals of continued rate cuts at the FOMC meeting on December 9-10, 2025. Additionally, the publication of economic data delayed due to the temporary government shutdown has further worsened sentiment.

US retail sales for September 2025 only rose 0.2% (m/m), far below expectations and marking the weakest performance in four months. The Producer Price Index (PPI) did meet expectations at 0.3% (m/m), but core PPI only increased by 0.1%, indicating weaker price pressures than anticipated.

This series of data reinforces a dovish outlook on The Fed's policy. Scott Helfstein, head of investment strategy at Global X, stated that stable producer prices and retail sales showing moderate consumer slowdown keep the prospects for a rate cut in December intact.

Meanwhile, weekly jobless claims fell from 222,000 to 216,000—better than the expected 226,000. However, this figure is not enough to change market confidence that a rate cut remains the most likely scenario. Traders still view future interest rate policies as potentially putting further pressure on the US Dollar.

Political dynamics also color the prospects for monetary policy. Polymarket predictions show an increased chance for Kevin Hassett to replace Jerome Powell as Chair of The Fed. Hassett is known as a very dovish figure and is considered close to US President Donald Trump—a combination that signals further pressure for policy easing into next year.