Dollar eases as traders bet Fed done with rate hikes

As traders bet that the U.S. Federal Reserve was probably done raising interest rates, the dollar continued to weaken against a basket of currencies on Friday and appeared headed for a weeklong fall. This increased risk aversion. The dollar index, which compares the value of the US dollar to six competitors, was at 106.22 on Thursday, not too far off its one-week low of 105.80. The index is expected to decline by 0.3% this week, marking just its third losing week since July. According to the CME FedWatch tool, markets are now pricing in a less than 20% possibility of a rate increase in December, down from 39% a month earlier, following the U.S. central bank’s decision to maintain interest rates constant on Wednesday. In a sign of the economy’s resiliency, the Fed did, however, leave the door open to a further rise in borrowing costs. According to data released on Thursday, there was a little increase in the number of new claims for unemployment benefits made by Americans last week, despite the labour market continuing to show few signs of a severe downturn. Investor attention will now be focused on the October non-farm payrolls data, which is expected to show 180,000 jobs. A lower number would probably result in more pressure on the dollar. Given the strength of the American economy relative to the rest of the globe, analysts predicted that any decline in the dollar would likely only last temporarily.

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Please note that this articles does not offer any instructions or suggestions regarding investment decisions. Therefore, it is essential that you carefully evaluate your financial situation and conduct thorough analysis, or seek advice from a qualified professional, before making any investment decisions.