The dollar rallied as markets continued to bet that the Federal Reserve would adopt a cautious path of rate cuts. According to the London Stock Exchange Group, the market expects the Federal Reserve to cut interest rates by a cumulative 38 basis points by December 2025. The Fed cut interest rates by 25 basis points a week earlier, but hinted that the pace of rate cuts will slow down in the future. Analysts at Deutsche Bank said in a note that the Fed is likely to skip rate cuts in January, which could turn into a long pause in policy easing in 2025.