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| The most prominent influences on the dollar’s movements |
The most prominent influences on the dollar’s movements
The US dollar index recorded a clear decline during trading today, Tuesday, due to the presence of some negative developments, which had a clear negative impact on its movements and weakened demand for US currency during currency market trading. The following are the most prominent influences on the dollar’s movements:
The statements of decision-makers within the Federal Reserve dropped the dollar index
The US dollar was affected during trading today by warnings from some decision-makers within the Federal Reserve about continuing to raise interest at an accelerated pace, as Loretta Mester, a member of the US Federal Reserve Bank of Cleveland State, confirmed that it is too early to talk about stopping the interest rate hike, but she considers it logical to slow the pace. A little stress.
The Fed member added that she does not believe that market expectations regarding the upcoming US Fed decision are far from reality, that the US Fed is now moving to a different pace with regard to monetary policy, and that it is appropriate for the US Fed to slow down the pace of tightening from 75 basis points in the December meeting.
Weak US bond yields weigh on the dollar
Also, the US dollar declined due to the weak yield on US bonds of various terms, as the yield on US bonds for 10 years stabilized near the level of 3.795%. Meanwhile, the 20-year US bond yield decreased by 0.71%, to 4.1096%. At the same time, the yield on US bonds for 30 years stabilized, recording about 3.886%, a decrease of about 0.53%, and this weakness in the bond yield clearly damaged the movements of the US dollar.
Profit-taking operations drop the dollar index
Likewise, the US dollar declined significantly due to profit-taking operations on the US currency, as the US dollar had risen during the trading of the last session and recovered strongly, benefiting from the increasing demand for it as a safe haven in light of the high frequency of new Coronavirus infections in China and the recording of numbers that are the highest since Last April, which raises global concerns about the slowdown in the global economy, and this, in turn, supported the demand for the dollar index in the transactions of the last session.
How is the US dollar index affected by these developments?
In light of these negative developments and weak demand for the dollar due to profit-taking operations, the US dollar index declined clearly, but it settled at the highest level of 107 points, as it is currently trading near the level of 107.37 points, with a decrease of 0.47% and it awaits any new developments in the markets that may affect with his trades.