Dollar Dominates While Global Currencies Struggle Amid Rate Speculations

The dollar achieved its best weekly performance in a month, bolstered by investor expectations that the Federal Reserve will slow its rate cuts next year. In contrast, the yen and sterling struggled, influenced by economic data and central bank decisions across Europe and Japan.

The dollar marked a significant weekly gain, buoyed by speculation that the Federal Reserve will ease its rate cuts in the coming year. Investors responded to recent economic data, while central bank actions in Europe and Japan influenced global currency shifts.

The dollar index held firm at 106.94, poised for a notable 1% weekly increase. As economic indicators showed a cooling job market and moderated inflation, markets anticipated a Fed rate cut in December but saw a slower pace in subsequent reductions.

In Europe, sterling faltered after a surprise contraction in UK economic activity, while the yen faced volatility with Bank of Japan's rate decisions looming. Analysts suggest the dollar's dominance will continue to shape global currency movements in the unpredictable months ahead.

(With inputs from agencies.)