Dollar's Decline Amid Fed's Easing Outlook

The U.S. dollar faced its worst weekly performance since July, as expectations for more Federal Reserve monetary easing rise. A CME Group outage halted currency, stock, and commodity futures trades. Meanwhile, the Japanese yen stabilizes, and Britain's tax hike stirs mixed reactions.

The U.S. dollar is encountering its most significant weekly downturn since late July amid increasing anticipation of further monetary easing by the Federal Reserve in December. As the U.S. holiday created a liquidity lull, an outage at CME Group's CyrusOne data centers caused a trading halt across its currency, stock, and commodity futures platforms.

Lee Hardman, a senior currency analyst in MUFG's global markets division for EMEA, suggests that the market may not see a drastic impact but highlights the likelihood of a quiet end to the month. The dollar index, representing the greenback's strength against a basket of six major currencies, was noted at 99.711, showcasing a slight recovery but destined for its steepest one-week decline since last July.

Elsewhere, the yen's fluctuations, reflecting labor market and inflation conditions in Japan, highlight the region's economic management dynamics. Concurrently, the euro and sterling manifest diverse trends amid geopolitical discussions and fiscal strategies in Europe.

(With inputs from agencies.)