What are the reasons for the decline of the US dollar?

U.S. dollar

index decreased dollar The US dollar clearly during today’s trading, Tuesday, in conjunction with the continued weakness of demand for the US currency, in light of the presence of some negative developments, which had a negative impact on the movements of the dollar in the markets, and the following are the most prominent influences on the movements of the dollar in the currency markets:

Statements by decision makers within the Federal Reserve continue to weaken the dollar

The US dollar is still declining due to some statements by decision-makers within the Federal Reserve about the need to stop raising interest rates or at least slow down the rate of interest rate hikes during the coming period, especially after the release of inflation data, and in this context, US Federal Reserve member Patrick Harker said today Tuesday, that the US Federal Reserve is likely to slow down the pace of interest rate hikes in the coming months; Because monetary policy is close enough to be tight enough. He added that by next year, the US Federal Reserve may fix an interest rate at a certain level, so that the Bank can know the effects of this measure on the US economy.

Weak yields on US bonds increase pressure on the dollar

Also, the US dollar declined, affected by the weakness of the US bond yield during trading, as the US bond yield for 10 years decreased by 1.27%, recording about 3.818%. Likewise, the 20-year US bond yield declined by 1.35%, to reach 4.2263%. At the same time, the yield on US bonds for 30 years decreased by 1.79%, to record about 3.987%, and this drop in bond yields clearly damaged the movements of the US dollar.

Negative economic data weighs heavily on the dollar

Also, the weakness of economic data, on top of which was the producer price index data, had a clear negative impact on US dollar trading, as the US census data released today, Tuesday, revealed the negativity of the US producer price index data at the end of last October, and the index recorded a growth of about 0.2% during last October, with less Market expectations are that the index will grow by 0.4%. The previous reading of the index had recorded a growth of 0.4% during last September, and it was revised downward to 0.2% during the same period.

How was the US dollar index affected by these developments?

In light of these negative developments and the weak demand for the dollar due to concerns about slowing down the pace of monetary tightening, the US dollar index fell very strongly, and settled below the level of 106 points, as it is currently trading near the level of 106.35 points, with a decrease of 0.31% and awaits any new developments. Markets may affect his trading.


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