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The value of the dollar against a basket of currencies fell sharply this week, as investors believe that due to the slowdown in inflation in the United States of America (USA), the cycle of raising interest rates by the American central bank has ended.
The dollar index, which tracks the value of the US against the six most important world currencies, sank this week by 1.9 percent to 103.81 points, the lowest level since the beginning of September, reports SEEbiz.
The dollar index, which tracks the value of the US against the six most important world currencies, sank this week by 1.9 percent to 103.81 points, the lowest level since the beginning of September, reports SEEbiz.
At the same time, the dollar fell by 2.1 percent against the European currency, so the price of the euro reached USD 1.0910.
The dollar exchange rate also fell against the Japanese currency, 1.2 percent to 149.65 JPY. The sharp drop in the dollar exchange rate followed on Tuesday after it was announced that in the US in October the inflation rate slipped to 3.2 percent from 3.7 percent in September.
And a series of other reports confirmed that inflation is subsiding, which supported the thesis that the Fed will not need to further tighten monetary policy. Since March last year, the Fed has raised key interest rates by 5.25 percentage points to curb inflation.
However, at the last two sessions, the leaders of the Fed left interest rates unchanged, so investors believe that the cycle of increasing the price of money is over, although the Fed says that further tightening of monetary policy is possible.
In the next period, market movements will depend mainly on speculation about when the Fed could start reducing interest rates. In the money market, it is estimated that the first interest rate cut by the Fed could follow in May of next year, and that by the end of the next year, interest rates could be reduced by a total of one percentage point.
Source: SEEbiz
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