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The Dollar Declines Against The Yen But Recovers Against The Euro.

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The Dollar Declines Against The Yen But Recovers Against The Euro.

(CTN News) – On Thursday, the dollar experienced a decline against the Japanese yen but managed to recover most of its earlier losses against the euro.

This occurred during a period of low trading activity as investors focused on the potential interest rate cuts by the Federal Reserve in the coming year.

The dollar index, which measures the value of the US currency against six major currencies, reached a new five-month low of 100.61.

However, it slightly improved and ended the day down by 0.05% at 100.82. This year, the index is expected to decline by 2.58%, breaking a streak of strong gains over the past two years.

The decline in the value of the dollar can be attributed to the increasing expectations of rate cuts, particularly after the Federal Reserve’s unexpectedly dovish stance at its December meeting.

This has led to a more aggressive approach by the market towards anticipating further easing measures by the Fed.

According to Marc Chandler, the chief market strategist at Bannockburn Global Forex in New York, the market sentiment has become even more supportive of Federal Reserve easing.

The Japanese yen was the most significant mover of the day, with the dollar falling by as much as 0.82% to 140.66 yen, its lowest level since July 28. It ended the day down by 0.73% at 140.78 yen. Despite this decline, the dollar is still on track to achieve a 7.38% gain against the Japanese yen for the year.

The yen is being sold by investors as the BOJ moves closer to ending its negative interest rate policy. Traders are closing their positions, leading to a decrease in net shorts in the yen against the US dollar.

Market participants anticipate the BOJ to raise rates next year, but BOJ Governor Kazuo Ueda is not in a hurry to unwind the ultra-loose monetary policy.

In the currency market, the euro slightly declined against the dollar, while the pound rose to its highest level since August 1. The Swiss franc strengthened to its highest level since January 2015.

SEE ALSO:

Credit Suisse Fined $3 Million In Singapore Probe.

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