Dollar hovers near five-week low on Fed rate cut bets

The U.S. dollar hovered near a five-week low against major currencies as investors anticipated a Federal Reserve rate cut next week. Markets expect a quarter-point reduction, with potential for more cuts next year. The dollar index was flat at 99.065, after hitting a five-week low of 98.765. Traders are pricing in 86% odds of a Fed cut. Key economic data, including unemployment benefits and inflation gauges, are influencing expectations. The dollar's performance is also affected by speculation about White House economic adviser Kevin Hassett potentially becoming Fed Chair.