Dollar consolidates before closing worst week since November

The Dollar Index shows resilience despite the worst weekly performance over one month, hovering at 102.60. The dollar was lifted by strong S&P Global Services PMI figures from December.

Dovish bets on the Fed may limit the upward movement. The dollar, measured by the DXY index, is trading at 102.60, posting daily gains but marking its worst weekly performance in over a month.

This movement comes on the back of strong US Services PMI data and investors’ efforts to consolidate the losses of the last three sessions.

The US central bank held a dovish stance in Wednesday’s meeting, embracing lowered inflation at the end of 2023 with no planned rate hikes in 2024 and forecasting 75 bps of easing for next year. In light of this indication, market anticipations align somewhat with the Fed’s view, catalyzing risk-on flows and dampening demand for the haven dollar.

The Dollar Index (DXY) records gains, wrapping up at around 102.4. This comes after a rough week for the DXY, marking its worst weekly performance in over a month.