Dollar Weakens on Growing Fed Cut Expectations; Bitcoin Hits New Record High

• Dollar hits multi-week low amid near-certain September Fed rate cut, 7% chance half-point cut.

• Dollar weakens to July lows; Aussie dollar rises 0.4% on strong July jobs data.

• Bitcoin hits $124,480 amid weaker dollar and Trump-backed crypto regulations.

The U.S. dollar dropped to multi-week lows on Thursday as traders intensified expectations that the Federal Reserve will resume cutting interest rates next month. Market data from LSEG signals near certainty of a rate reduction on September 17, with about a 7% chance of a larger half-point cut.

Analyst Kyle Rodda of Capital.com said, "The question for markets is not if the Fed cuts in September but by how much." Signs of a cooling labor market have led futures to price in multiple rate cuts before the end of the year.

Amid political pressure, President Donald Trump has repeatedly criticized Fed Chair Jerome Powell for delaying easing measures and even threatened to remove him prior to the expiration of his term in May. Treasury Secretary Scott Bessent urged the Fed on Wednesday to begin a series of cuts, potentially starting with a 50-basis-point reduction, while also remarking that the Bank of Japan is "behind the curve" after postponing rate hikes.

The dollar slipped 0.7% against the yen, hitting 146.38—the lowest since July 24. The British pound climbed to $1.3590, its highest since that date,while the euro steadied near $1.1712, just shy of Wednesday's peak of $1.1730, levels last observed on July 28.

The U.S. Dollar Index, which tracks the greenback against six major currencies including the yen, pound, and euro, eased to 97.673 following a 0.8% decline over two sessions, dipping earlier to 97.626 on Wednesday—the lowest in nearly a month.

Australia's dollar appreciated by as much as 0.4%, reaching a high of $0.65685—the strongest since July 28—thanks to robust July employment figures. The data showed increased full-time hiring and a drop in the unemployment rate from a 3½-year high, reducing pressure on the Reserve Bank of Australia to deliver further rate cuts after this week's easing.

Bitcoin surged to its highest level since mid-July, buoyed by a combination of a weaker dollar, concerns over political influence on central bank independence, and rising risk appetite amid anticipated Fed easing.

The world's leading cryptocurrency reached an intraday peak of $124,480.82 before last trading near $123,538.31. Institutional interest, fueled by regulatory developments promoted by President Trump—who styles himself the "cryptocurrency president"—has underpinned bitcoin's rise. A recent executive order also allows crypto assets to be included in 401(k) retirement plans.

IG analyst Tony Sycamore highlighted ongoing corporate acquisitions of bitcoin by firms like MicroStrategy and Block Inc., noting that a sustained rally past $125,000 could propel prices toward $150,000.