“Much of the recent dollar weakness is because we are nearing the end of the tightening cycle, and the exact timing and length of the pause will determine the dollar’s behavior,” said Oanda’s Ed Moya.
“For now it looks like investors are positioning for a bit of dollar weakness, but there are still plenty of global risks on the table, so we’re not going to see this as a one-way move lower for the dollar,” he added.
The US currency lost 0.5% before him euro, to $1.0554, and was up 0.2%, at $1.2240, against the pound sterling.
Monthly US consumer inflation will also be released next week, one day before the conclusion of the Fed’s December 14 policy meeting, and could be instrumental in setting long-term monetary policy expectations. .
The drop in energy prices, inflation forecasts and expectations that the Fed will continue to raise rates at the same aggressive pace have subtracted 6.2% from the value of the greenback so far this quarter.
The US currency is heading for its worst result since the third quarter of 2010, when it lost 8.5%, and its worst fourth-quarter result since 2004, according to Refinitiv data.
Source: Ambito
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