Dollar Dips Amid CME Outage and Easing Bets

The dollar faced its worst weekly performance since July due to expectations of U.S. monetary easing and a CME Group trading halt. Despite holiday-thinned liquidity, forex volatility decreased. U.S. Fed funds futures indicate a high probability of a rate cut, influencing global currency dynamics.

The dollar faced its most significant weekly decline since late July, amidst increasing bets for further monetary easing in the U.S. This came as CME Group's platform outage temporarily halted trading in several currency pairs, adding to the liquidity strain caused by the Thanksgiving holiday.

The dollar index showed a slight recovery, gaining 0.1% to reach 99.599 after five days of depreciation. Despite thinner trades, forex market volatility eased. Meanwhile, U.S. Fed funds futures now suggest an 87% likelihood of a 25-basis-point rate cut at the Federal Reserve's upcoming policy meeting.

Globally, the Japanese yen experienced volatility amid potential financial interventions, while the euro and sterling saw modest declines influenced by geopolitical and economic developments. In contrast, the Australian dollar and kiwi posted significant fluctuations amidst central bank decisions.

(With inputs from agencies.)