US Dollar Faces Significant Weekly Decline Amid Market Anticipation

Global financial markets are bracing for the US dollar's largest weekly drop in four months, as trading activity on Thursday reflected weak volumes due to the Thanksgiving holiday in the United States.

Investor focus is shifting towards the anticipated direction of monetary policy for the upcoming year, with analysts suggesting that the US Federal Reserve may be "the only major central bank poised to initiate rate cuts."

In Asian markets, the Japanese yen appreciated approximately 0.4%, reaching 155.87 yen per dollar, as analysts noted a "change in tone from Bank of Japan officials regarding potential monetary tightening."

The euro surpassed the 1.16 dollar mark, while the British pound increased to 1.3265 dollars, its highest level since late October, indicating its most substantial weekly gains since August. Analysts linked this strength to "the UK budget alleviating some concerns over financial conditions."

The New Zealand dollar surged to its highest level in three weeks at 0.5728 dollars, gaining nearly 2% following the Reserve Bank of New Zealand's announcement. Despite a rate cut, the bank suggested a "discussion about maintaining rates," indicating that the "easing cycle may have concluded." Markets are anticipating another rate increase by December 2026.

Similarly, the Australian dollar strengthened after inflation data exceeded expectations, reinforcing the view that "the easing cycle there has also likely ended."

The dollar index, which gauges the US currency's performance against a basket of major currencies, stabilized at 99.433 points after retreating from a six-month peak reached last week. The index is on track to record its most significant weekly decline since July.

The Chinese yuan remained steady at 7.08 against the dollar, supported by a "stabilization mechanism implemented by the People's Bank of China."