The market is closely watching the key meeting in December.

What’s the current consensus? The US economy is slowing down, inflation is cooling off, and the Fed is likely to ease its stance. These expectations are putting the dollar under serious pressure.

A quick glance at the New York closing data: the dollar index edged up 0.12% to 99.10, but non-US currencies weakened across the board. The euro fell 0.06% against the dollar to 1.1637, the pound dropped 0.08% to 1.3322, and the Australian dollar fared worse, down 0.23% to 0.6624. On the contrary, the dollar rose 0.38% against the yen to 155.9320, up 0.29% against the Canadian dollar to 1.3858, and up 0.27% against the Swiss franc to 0.8068. The offshore yuan slipped 28 points to 7.0719.

How would you describe recent US economic data? Tepid. Employment isn’t as strong as before, manufacturing remains sluggish, but inflation has finally slipped into a range the Fed can live with.

That’s why the market is convinced an easing cycle is coming. Now everyone’s waiting for the Fed Chair to speak—if he sounds tough, the dollar might catch a break; but if he emphasizes economic pressures and continued disinflation, expectations for rate cuts will skyrocket.

That said, the dollar isn’t entirely without support. The latest consumer confidence data is still decent, which offers some backing.

At the end of the day, the dollar’s moves are being completely driven by policy expectations. The modest improvement in economic data? For now, it’s not enough to change the overall picture.