The US dollar is Heading For Its First weekly Decline in a Month

The dollar is heading for its first weekly decline against its major peers since the beginning of last month, retreating from a one-year high as traders turned their attention to when the US Federal Reserve will start raising interest rates.

The DXY dollar index, which measures the greenback against six major currencies, fell 0.1% to 93.945 points during Friday’s trading. It is on its way to a decline of 0.19% this week, despite reaching its highest level since September 25 of last year at 94.563 points.

It is reported that improved market sentiment, which has led to higher global stocks, commodity prices, and bond yields, is also affecting the safe-haven dollar. Only against the yen – another haven currency – the dollar managed to maintain the momentum of the past five weeks, rising 0.33% on Friday and touching 114.075 yen for the first time since December 2018.

The dollar has risen since early September on expectations that the US Federal Reserve will tighten monetary policy faster than previously expected amid an improving economy and rising energy prices. The minutes of the Federal Reserve’s September meeting confirmed this week that stimulus scaling is certain to begin this year, although policymakers are deeply divided over inflation and what they should do about it.