The US dollar index fell below 97.50, attracting some sellers to follow the US PCE data.

Gate News bot reports that according to FXStreet, the US Dollar Index (DXY) measures the value of the US dollar against a basket of six major world currencies. During the Asian session on Wednesday, the index continued to hold steady, reporting around 97.25, which is the lowest level in three and a half years.

U.S. President Donald Trump is considering selecting the next Federal Reserve Chair ahead of schedule, which has sparked a new round of bets on a U.S. rate cut. Trump stated that he has narrowed down the list of potential successors to Powell to "three to four people," but did not disclose the final candidates. Concerns over the future independence of the Federal Reserve could weaken the exchange rate of the dollar against other currencies.

Carol Kong, a currency strategist at the Commonwealth Bank of Australia, stated: "Currently, it is expected that President Trump will choose a more dovish chair, which will exert downward pressure on FOMC pricing and the US dollar."

Meanwhile, according to Reuters, financial markets have reduced the likelihood of the Federal Reserve cutting interest rates at the next meeting in July from 12% a week ago to 25%, and have increased the projected rate cut by 64 basis points by the end of the year, up from about 46 basis points last week.

The U.S. Bureau of Economic Analysis (BEA) announced on Thursday that the U.S. Gross Domestic Product (GDP) decreased by 0.5% quarter-on-quarter in the first quarter of 2025. This figure is lower than the previous estimate and market expectations of -0.2%. The weak GDP data led to a decline in the dollar.

Traders will closely watch the U.S. Personal Consumption Expenditures (PCE) price index data for May, which is an inflation gauge that the Federal Reserve is focused on. If the report comes in stronger than expected, it may help limit the dollar's short-term decline.