Dollar faces strain amidst rate cut speculations in holiday trading

The dollar remained under pressure today, Wednesday, while the euro is approaching its highest level in four months. This is in light of expectations that the U.S. Federal Reserve will cut interest rates soon and weak year-end flows. As traders head out for holidays globally leading into the new year, the shortened week will likely see weak volumes. The dollar index, which measures the U.S. currency against six competing currencies, reached 101.54. That is close to its lowest level in five months at 101.42 which it touched last week. The index is heading towards a decline of 1.9 percent in 2023 after two consecutive years of strong gains. That is against the backdrop of the Federal Reserve raising interest rates to fight inflation. 'With little to speak of on the economic calendar for this week between global holidays, we do not expect a large swing in pricing to wrap up this calendar year,' said analysts at Monex USA. 'Liquidity across the world will remain quite thin as many offices remain closed, which could give us some choppiness in markets, but largely this week is expected to remain fairly uneventful.' Meanwhile, the euro fell 0.07 percent to $1.1034, after touching a four-month high of $1.1045 on Tuesday. The single currency has risen about 3 percent this year and is on its way to achieving gains for the third month in a row. Therefore, the euro is matching the rise it achieved last year. Source: Yemen News Agency