On the 19th, the dollar index declined by 0.34%, settling at 99.052 in late trading, reflecting growing caution among investors about the greenback’s near-term outlook. The drop was driven by a mix of stronger economic data from major overseas markets and a reassessment of central bank policy trajectories.
Non-USD Currencies Gain Ground
With the dollar weakening, major currencies like the euro, pound, and yen saw broad gains. The European Central Bank’s hawkish tone boosted confidence in the eurozone’s economic resilience, while higher-than-expected inflation data in the UK provided strong support for the pound.
- Euro rose nearly 0.5% against the dollar
- Pound broke through a key resistance level
- Dollar-yen fell for the third consecutive day
Shifting Market Focus
Traders are now turning their attention to the upcoming U.S. core PCE price index and the latest Fed meeting minutes for clues on whether rate hike momentum is cooling. Market expectations increasingly favor a hold on rates, with policymakers likely to adopt a more nuanced forward guidance.
Analysts suggest that if signs of U.S. economic slowdown become more pronounced, the dollar could face sustained downward pressure. Meanwhile, global capital flows may rebalance, offering emerging market currencies a window for recovery.