Dollar falls to two-month lows; Fed minutes loom large - The U.S. dollar fell to a more than two-month low in early European trade Monday, adding to last week’s sharp losses on increased expectations that the Federal Reserve has completed its rate-hiking cycle.

At 03:20 ET (07:20 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, fell 0.3% to 103.505, just above its lowest level since late August, extending its nearly 2% decline from last week - the sharpest weekly fall since July.

Dollar on back foot

The dollar has been on the back foot for the majority of the last week, after a string of soft labor market and inflation readings saw traders pricing in an even greater chance that the Fed was done raising interest rates, and that the central bank could begin trimming rates by as soon as March next year.

“The dollar's decline has been broad-based, meaning that even the unloved Japanese yen has found a few friends,” said analysts at ING, in a note. 

The focus is now largely on the minutes of the Fed’s late-October meeting for more cues on monetary policy, due for release on Tuesday. 

“This was the meeting where the Fed retained its tightening bias but included an acknowledgement that tighter financial conditions were doing some of the Fed's work,” ING added. “The market seems in the mood to look out for some dovish headlines here, and this can prove a negative dollar event risk.”

Euro gains despite falling German producer prices

In Europe, EUR/USD rose 0.2% to 1.0926, benefiting from the weak dollar even after German producer prices fell 11.0% on an annual basis in October, helped by a 27.9% yearly fall in energy prices.

This followed on from eurozone consumer prices being confirmed at 2.9% on an annual basis last week, down from 4.3% the previous month.

Yet a number of ECB policymakers have been keen to emphasise the need to keep interest rates at relatively elevated levels as inflation remains high.

"It would be unwise to start cutting interest rates too soon," Bundesbank President Joachim Nagel said in a speech on Friday. "We must not loosen policy until we are absolutely certain of returning to price stability on a lasting basis."

GBP/USD rose 0.3% to 1.2492, near a two-month peak, with Bank of England Governor Andrew Bailey set to speak later in the session. 

U.K. CPI plunged to 4.6% on an annual basis in October, from 6.7% in September, the largest fall in the annual CPI rate from one month to the next since April 1992.

However, U.K. inflation remains among the highest in the developed world, and the Bank of England has sought to stress that it is nowhere near cutting interest rates. 

Yuan, yen benefit from dollar weakness

In Asia, USD/CNY fell 0.6% to 7.1712, with the yuan climbing to its strongest level against the dollar since early-August. 

The People’s Bank of China held its benchmark loan prime rate near record lows on Monday, while also injecting about 80 billion yuan of liquidity into the economy. 

Separately, Chinese officials vowed more policy support for the country’s beleaguered property sector - a move that helped shore up confidence over one of China’s biggest industries. 

USD/JPY traded 0.8% lower at 148.41, strengthening below the 150 level to the dollar for the first time in nearly three weeks, with traders becoming less fearful of more U.S. rate hikes. 


Begin trading today! Create an account by completing our form

Privacy Notice

At One Financial Markets we are committed to safeguarding your privacy.

Please see our Privacy Policy for details about what information is collected from you and why it is collected. We do not sell your information or use it other than as described in the Policy.

Please note that it is in our legitimate business interest to send you certain marketing emails from time to time. However, if you would prefer not to receive these you can opt-out by ticking the box below.

Alternatively, you can use the unsubscribe link at the bottom of the Demo account confirmation email or any subsequent emails we send.

By completing the form and downloading the platform you agree with the use of your personal information as detailed in the Policy.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.5% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Back to top

Office network
  • London Office
    One Financial Markets 

    1 Finsbury Market
    EC2A 2BN
    United Kingdom

    T:  + 44 ( 0 ) 203 857 2000
  • Dubai Office
    One Financial Markets 
    OT19-39 Central Park Tower
    Dubai International Finance Centre
    United Arab Emirates
    T: + 971 44 22 888

One Financial Markets is the trading name of Axi Financial Services (UK) Ltd, a company registered in England with company number 6050593. Axi Financial Services (UK) Ltd is authorised and regulated by the Financial Conduct Authority in the UK (under firm reference number 466201) and the Financial Sector Conduct Authority in South Africa (with FSP number 45784).

The information on this site is not directed at residents of the United States, Belgium, Poland or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. is owned and operated by Axi Financial Services (UK) Ltd.

Award winning broker
We have been presented with a number of awards that recognise the quality of our service and dedication to our clients :

Best FSA Regulated Broker
Saudi Money Expo

Best Education Product
Saudi Money Expo

Best Broker - Online Trading
IAIR Awards

Best Institutional Broker
Saudi Money Expo

Best FX Services Broker
CN Forex

Top International
FX Broker 2015

Saudi Money Expo

Broker of the Year
Online Trading – Middle East

IAIR Awards

Best Forex
Customer Service 2018

JFEX Awards

We accept the following payment methods: