US dollar lost about half of annual growth on Fed rate expectations

It’s reported that the U.S. dollar lost about half of its annual growth. It happened for several reasons. Firstly, the U.S. Fed was expected to ease monetary policy. Secondly, it was assumed that China would remove or at least loosen covid restrictions.

According to the Bloomberg dollar index, the dollar had an increase of 16% year over year and has recently fallen a total of 7%. On Monday the index was down 0.4% in Asian trading. It’s noted that this is the lowest result in the last 5 months. This is the fifth consecutive day of decline, something that hasn't happened since April 2021 (when China loosened covid restrictions in Shanghai and Hangzhou to begin economic recovery).

Christopher Wong, a currency strategist at Overseas Chinese Banking Corp, stresses that the easing of covid restrictions in China and the Fed's policy adjustment are the two most anticipated events. This is what should become support for commodity-linked currencies.