Dollar sharpens decline to 2-1/5 month trough

Economies.com
2023-11-20 12:01PM UTC

Dollar fell in European trade against a basket of major rivals, sharpening losses for the second straight loss, and plumbing a 2-1/5 month trough amid the prospects the Fed has already wrapped up the current cycle of policy tightening.

 

Now markets are focusing on the likely date of the first interest rate cut in 2024, analysing new data to determine the timeline. 

 

The Index

 

The dollar index fell 0.35% to 103.47, the lowest since September 1, with a session-high at 103.97, after closing down 0.6% on Friday, the first loss in three days  . 

 

The index lost 1.9% last week, the second weekly loss in three weeks, and the largest since July.

 

Such a hefty loss came after a stream of weak US data,  which ruled out another interest rate hike by the Federal Reserve next month. 

 

Following the data, the odds for a Fed interest rate hike in December plummeted to just 1%.

 

Now investors put a 30% chance of a Fed interest rate cut in March 2024. 

 

Markets await more data to determine the likely path ahead for US policies, chief of which the Federal Reserve's meeting minutes, scheduled for release tomorrow. 

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