FOREX

The greenback is losing ground to its peers as we approach the end of the week. The US dollar index, which measures the performance of the American currency versus a basket of other majors, lost more than 5% in November. This loss happened as the markets reacted to changing circumstances. On the one hand, risk appetite improved, weighing on the haven dollar. Energy prices eased from the maximums reached over the summer, and hopes grew of a Chinese volte-face in relation to its strict Covid-zero policy. But perhaps more importantly, there is a growing consensus in the markets that the Federal Reserve will not go quite as far in its rate hiking cycle as previously expected. This sentiment found even more traction yesterday, with Jerome Powell saying in a speech that the slowdown in rate hikes is likely to start in December. These comments by the chairman of the Fed were more dovish than expected, and accentuated the ongoing dollar weakness.

Ricardo Evangelista – Senior Analyst, ActivTrades      

Source: ActivTrader

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