Early on Wednesday, the US dollar is trading bearish against major currencies on the back of disappointing home sales data for the previous month. At the time of writing, the US dollar index DXY is trading around 97.55.

According to data released by the National Association of Realtors, existing home sales came in weaker than expected, falling by 2.2% to touch a seasonally adjusted 5.38 million units in September. The decline in September followed two consecutive months of gains in existing home sales and was steeper than economists’ expectations, which were for a decline by 0.7% to 5.45 million units for this period.

The US dollar is also weakening as markets anticipate another rate cut by the Fed being announced at its upcoming meeting next week. Although the US-China trade tensions have begun to dissipate lately as both sides confirm working towards the phase one trade deal, economic data coming out of the US is still on the weaker side.

According to latest estimates by FedWatch, there is a 92.5% likelihood of another 0.25% rate cut coming up in October. Worries of an impending recession in the US economy on the back of the trade war continues to weigh on markets, keeping expectations high for the Fed to cut interest rates once again, and exerting pressure on the US dollar.