(MENAFN) The US dollar found itself under pressure on Tuesday, trading at its lowest levels against major currencies, including the euro, for several months. This comes as investors anticipate a decline in US interest rates next year, interpreting it as a signal to sell the dollar as a hedge.
Although the movements were modest in early Asian trading, the dollar index experienced a decline from its 200-day moving average on Monday. The Chinese yuan's rise contributed to substantial drops in the US currency.
The dollar index, which gauges the US currency's performance against a basket of six major currencies, witnessed a 1.9 percent decrease last week, coinciding with a significant uptick in US Treasury bond yields. Overnight, it lost an additional 0.5 percent, reaching 103.44 points.
Yesterday, the euro reached its highest level in three months at USD1.0952. This surge was partially attributed to limited support from European Central Bank board member Pierre Wunsch, who opposed market expectations of an interest rate cut in April.
The Chinese yuan achieved its highest level against the dollar in three months on Monday, thanks to the policies of the Chinese Central Bank. Meanwhile, the Australian and New Zealand dollars also saw gains against the US currency.
In early Tuesday trading, the yuan continued to rise, maintaining its gains at 7.1640 to the dollar. The Australian dollar experienced a slight increase to USD0.6561, just below the three-month high it reached on Monday at USD0.6564. The New Zealand dollar settled at USD0.6040.
Even the yen strengthened, reaching its highest level in seven weeks at 148.1 against the dollar overnight, settling at 148.3 dollars on Tuesday.
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