Dollar Vulnerable After Fed's Hawkish Pivot

London: 6 November 2023 (TraderMade): Global currencies held steady on Monday as investors anticipated further declines in the U.S. dollar following a shift in tone from the Federal Reserve.

Last week, world stocks enjoyed the best performance in a year as growing consensus emerged that the Fed was ending its rate hikes.

Weaker US jobs data, soft global manufacturing figures, and declining long-term Treasury yields weighed on the dollar, strengthening sterling, the Australian dollar, and the Yen's rebound from below 150 per dollar.

Additionally, experts anticipate that the European Central Bank will cut rates by April, while the Bank of England is expected to ease in August.

Latest updates on significant pairs

The dollar index (USDX) dipped 0.07% to 104.839 compared to its close on Friday at 104.91251. The EURUSD pair gained 0.13% to 1.07417, resulting in the dollar's low since mid-July and a six-week low.

The USDJPY pair was at 149.653 on Monday. The yen's recovery from last week suggested that Japanese authorities may not need to intervene in the currency. The yen had reached 151.74 per dollar last week, nearing the lows of last October that prompted intervention by the Bank of Japan.

The GBPUSD pair had closed on Friday at 1.23811. On Monday, 6 November, at about 07:58 GMT, the pair was at 1.23828, showing an increase of 0.014%. Despite a strong rally last week, the currency remains down approximately 6% over the past four months.

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