Dollar declines amid expectations of stopping US interest rate hikes

Major currencies stabilized on Monday as investors braced for continued dollar losses that began at the end of last week after the Federal Reserve eased its statements indicating monetary tightening.

The dollar index fell 0.08 percent to 104.99, and the euro rose 0.08 percent to $1.0738. The dollar index fell by more than 1 percent last week, the largest decline since mid-July, reaching its lowest level in six weeks.

Global stocks had their strongest week in a year, with expectations of the US Federal Reserve ending its monetary tightening cycle gaining momentum.

Other indicators, such as weak US jobs data, declining manufacturing data from around the world, and a decline in long-term Treasury bonds, also put pressure on the dollar, while pushing the pound sterling and the Australian dollar to rise, and the Japanese yen to recover from the 150 level against the dollar.

But the Japanese yen recorded a decline of 0.1 percent, trading at 149.48 to the dollar. The yen reached 151.74 to the dollar last week and approached low levels recorded in October of last year, prompting the Bank of Japan to intervene with dollar sales.

Sterling settled in the latest trading at $1.2373. Britain’s fourth-quarter GDP data is expected to be released this week, and while sterling rose strongly last week in a market suffering from a clear shortage of the currency, it is still down six percent in four months.