The dollar index is staying largely unmoved around 98 mark as safe haven demand amid geopolitical tensions are seen offset by expectations of larger than expected Federal rate cuts. Latest data from the Institute for Supply Management on Monday showed its reading on U.S. manufacturing activity unexpectedly decreased in the month of December. ISM said its manufacturing PMI edged down to 47.9 in December after slipping to 48.2 in November. With the unexpected dip, the manufacturing PMI dropped to its lowest reading of 2025. Focus now shifts to US ISM Services Purchasing Managers Index (PMI) report that will be published later today and US December employment report on Friday for further cues on interest rates. Meanwhile, Federal Reserve Governor Stephen Miran is reportedly calling for aggressive rate cuts exceeding 100 basis points in 2026, arguing that current monetary policy remains restrictive and is holding back economic growth. The dollar index that measures the greenback against a basket of currencies is quoting at 98.30, almost flat on the day.

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