The U.S. dollar is on track for its biggest weekly decline in four months, with holiday-thinned trading amplifying moves as investors reassess the global rate landscape. With markets increasingly convinced that the Federal Reserve will begin cutting rates in December, the U.S. now appears poised to ease ahead of other major economies – putting downward pressure on the greenback. The shift comes as traders brace for a year marked by diverging monetary policies and widening currency volatility.
At the same time, several global currencies strengthened on central-bank signals. The New Zealand dollar surged after policymakers adopted a more hawkish tone, hinting that further tightening may still be on the table. Australia’s dollar also firmed following hotter-than-expected inflation data, while the yen gained modestly as Bank of Japan officials signaled a more assertive stance. The euro, meanwhile, eased slightly after touching a 1.5-week high.
