U.S. Dollar Falls Amid Fed Rate Cut Speculation

(RTTNews) - The U.S. dollar weakened against other major currencies in the late Asian session on Tuesday, as traders remain optimistic about the outlook for interest rates following last week's weaker-than-expected US jobs data. They also remain cautious ahead of key U.S. inflation readings due later in the week that could influence the US Fed's rate trajectory.

The benchmark adjustment of the US Nonfarm Payrolls data, which is anticipated to reveal a severe decline in the US labor market.

Global political turmoil could also influence the Federal Reserve's rate trajectory.

Amid growing concerns over a softening U.S. labor market, traders currently expect almost three Fed cuts this year, starting this month.

CME Group's FedWatch Tool is currently indicating a 90.2 percent chance the Fed will lower rates by a quarter point later this month.

In the Asian trading today, the U.S. dollar fell to more than 1-1/2-month lows of 1.1780 against the euro and the 0.7916 against the Swiss franc, from yesterday's closing quotes of 1.1769 and 0.7929, respectively. If the greenback extends its downtrend, it is likely to find support around 1.18 against the euro and 0.77 against the franc.

Against the pound and the yen, the greenback slid to nearly a 4-week low of 1.3583 and 146.82 from Monday's closing quotes of 1.3552 and 147.38, respectively. The greenback may test support near 1.37 against the pound and 146.00 against the yen.

Against the Australia and the New Zealand dollars, the greenback dropped to more than a 1-1/2-month low of 0.6615 and nearly a 4-week low of 0.5957 from Monday's closing quotes of 0.6598 and 0.5945, respectively. The greenback is likely to find support near 0.66 against the aussie and 0.61 against the kiwi.

The greenback edged down to 1.3794 against the Canadian dollar, from an early high of 1.3811. On the downside, 1.36 is seen as the next support level for the greenback.

Looking ahead, U.S. Redbook reports and Non-Farm Payrolls annual revision are slated for release in the New York session.