The US dollar weakened in Asian trading on Monday as traders increasingly bet on a 50 basis point interest rate cut by the Federal Reserve this week. The dollar's decline lifted major currencies like the Japanese yen, which rose to its highest level since July 2023. After weeks of debate over whether the Fed would kick off its easing cycle with a 25 or 50 basis point rate cut, traders leaned towards the latter. Futures prices tied to the Fed's decision this week show a 58% probability of a 50 basis point cut, compared to a 50/50 chance late Friday. "We believe the Fed is about to embark on a new easing cycle, which is a headwind for the US dollar," said Rodrigo Catril, a strategist at National Australia Bank. "The US dollar is set to embark on a cyclical decline as the Fed eases monetary policy next year, bringing the funds rate down to a neutral level, even below neutral." (Gold Ten)