The dollar fell today, Monday, to its lowest levels in two months, continuing a series of losses that started last week as traders confirmed their belief that U.S. interest rates may have peaked and shifted their focus to when the Federal Reserve might begin cutting rates. The Chinese yuan reached its highest level in three months in domestic and international markets, supported by the Chinese central bank, contributing to the rise of the Australian and New Zealand dollars, which are often used as alternatives to the yuan in liquidity.
The dollar index dropped in Asian trading to 103.53, its lowest level since September 1, extending its continuous losses from last week to nearly two percent. This is its worst weekly decline since July. Against the weakening U.S. dollar, the euro recorded 1.09365 dollars, reaching its highest level since August, while the Japanese yen remained stable at 148.68 versus the dollar, marking its highest level in a month.
Markets have abandoned expectations that the U.S. central bank would raise interest rates again after a series of weaker-than-expected economic indicators in the U.S. last week, particularly after a lower-than-expected inflation reading. The British pound rose 0.14 percent to 1.2480 dollars, nearing a two-month high, while the euro was traded at 1.09185 dollars in the latest trading ahead of the Eurozone Purchasing Managers' Index reading scheduled for release this week.
The Japanese yen remained strong and did not hit 150 versus the dollar, rising 0.3 percent to trade at 149.17. The Chinese yuan also increased in the domestic markets by 0.5 percent to its highest level in more than three months at 7.1700 against the dollar, while the yuan in international markets received a similar boost, jumping nearly 0.6 percent to its three-month high at 7.1703 against the dollar. The Australian dollar rose 0.5 percent to 0.6546 dollars, having reached a three-month high of 0.6563 dollars earlier in the session, while the New Zealand dollar increased by 0.54 percent to 0.6025 dollars.
