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Dollar Plunges: Longest Losing Streak Since 2020
6 Dec
Summary
- The US dollar is nearing its longest losing streak since mid-2020.
- The dollar's value declined by 0.1% on the WSJ Dollar Index.
- Stronger expectations for lower U.S. interest rates are pressuring the dollar.
The U.S. dollar is currently on a significant downward trajectory, facing its longest period of decline since the summer of 2020. As of today, the WSJ Dollar Index, which measures the dollar against a basket of major currencies, has fallen by 0.1%. If this trend continues through the close of trading today, it will represent the eighth consecutive day of losses, a duration not seen since June 2020.
This sustained weakening is being influenced by several market factors, most notably the growing anticipation of potential interest rate reductions by the U.S. Federal Reserve. Such expectations often lead investors to seek higher yields elsewhere, thereby decreasing demand for the dollar.
The ongoing decline suggests a shifting sentiment in the currency markets, with investors re-evaluating the U.S. economic outlook and monetary policy. The extended losing streak highlights a notable loss of strength for the dollar on the international stage.
