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Forex, dollar fall, traders focus on US rate cuts in 2024 from Reuters

Forex, dollar fall, traders focus on US rate cuts in 2024 from Reuters

© Reuters. Bunkonote of diversity is 100 dollars. REUTERS/Kacper Pempel

SINGAPORE/LONDON (Reuters) – The yen, the euro and the pound fell to five-month highs against the U.S. currency as the Federal Reserve pushed markets to avoid a recession in 2024, as bets fell.

At 1.15 pm, the dollar index, which measures the US currency against six peers, lost 0.23% to 100.757, hitting a fresh five-month low. The index is on track for a 2.7% decline in 2023, snapping two consecutive years of strong gains.

The most important component of the session was the Japanese yen. The dollar lost 0.7% to 140.83 yen, hitting its lowest level since July.

The yen is particularly sensitive to movements in US rates and the benchmark 10-year Treasury yield fell nearly 10 basis points yesterday, the lowest since July.

While the central bank took an unexpectedly dovish stance at its December meeting, leaving open the possibility of an interest rate cut next year, other major central banks, including the European Central Bank, argued for keeping rates high for longer.

The euro rose 0.1% to $1.1116, hitting a five-month high in the previous session. The single currency is heading towards an annualized gain of 3.7%.

Pound rises to $1.2776. The British currency is on track for a 6% gain this year, its best since 2017.

(Editing by Antonella Cinelli and translated by Camila Bori)

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