Dollar beaten to over two-month low as Fed cut bets take charge

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The dollar slid to a two-month low on Monday, extending a downtrend from last week as traders reaffirmed their belief that U.S. rates have peaked and turned their attention to when the Federal Reserve could begin cutting rates.

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20 Nov 2023

The yuan struck three-month highs in both the onshore and offshore markets, propped up by China's central bank, which gave the Australian and New Zealand dollars a leg up, as the two are often used as liquid proxies for the yuan.

The dollar index in Asia trade bottomed out at 103.53, its weakest level since Sept. 1, extending its nearly 2% decline from last week — the sharpest weekly fall since July.

Against the weaker greenback, the euro hit its highest since August at $1.09365, while the yen firmed at a one-month high of 148.68 per dollar.

Markets have priced out the risk of further rate increases from the Fed after a slew of weaker-than-expected U.S. economic indicators last week, particularly after an inflation reading that came in below estimates.

Focus now turns to how soon the first rate cuts could come, with futures