TOKYO, Nov 28 Reuters The U.S. dollar ticked down to a threemonth low against peer currencies on Tuesday after slipping overnight on weakerthanexpected new home sales data, while traders hunkered down on bets that the Federal Reserve could start cutting interest rates in the first half of next year.

U.S. new home sales fell 5.6 to a seasonally adjusted annual rate of 679,000 units in October, data showed, below the 723,000 units expected by economists polled by Reuters and sending Treasury yields into a decline.

The dollar index , a measure of the greenback against a basket of currencies, was last at 103.16, hanging around its lowest since Aug. 31. The dollar was track for a loss of more than 3 in November, its worst performance in a year.

Market expectation that the Fed39;s rate increase cycle has finally come to an end has also put downward pressure on the greenback. U.S. rate futures showed about a 25 chance that the Fed could begin cutting rates as early as March and increasing to nearly 45 by May, according to the CME FedWatch tool.

Slowing growth momentum, peak rates, rate cuts next year, and unwinding of long positioning it39;s the dynamic feeding a weaker U.S. dollar and driving the entire currency complex, said Kyle Rodda, senior financial market analyst at Capital.com.

Anything that brings that trend into question will change the outlook; however, the bar for that to happen is high, he added, saying the dollar likely has more room to fall.

Traders are…