Dollar's Downward Spiral Continues Amid Mixed Fed Hopes

The US Dollar (USD) continued its downward trend this week, coming close to four-month lows and challenging the 98.50 zone.

Despite a lack of major events, such as BoJ-MoF FX intervention or significant geopolitical developments, the Dollar's decline persisted.

The release of US inflation figures showed consumer prices remaining above the Fed's target, which may boost investors' confidence in an upcoming rate hike at the next meeting.

However, opinions on when to implement this hike are mixed among FOMC members, with some advocating for a sooner approach and others being more cautious.

The majority of market expectations still point towards a 25-basis-point rate increase, but nearly 50 basis points of tightening is forecasted by year-end.