Dollar weakens for a 4th day on U.S. rate view

Dollar weakens for a 4th day on U.S. rate view

LONDON- The U.S. dollar fell for a fourth consecutive day on Friday to its lowest in more than two months as investors took the view that most of the recent hawkishness from the U.S. central bank has already been priced in. On Friday, the greenback slipped 0.2% to 94.62 against a basket of currencies =USD , its lowest since early November. On a weekly basis, it is set to weaken 1.11%, its biggest drop since December 2020. On Thursday, it fell below a 100-day moving average for the first time since June 2021. "The U.S. economy is firing on all cylinders, but the flattening yield curve and weaker dollar is sending a different message," said Kenneth Broux, an FX strategist at Societe Generale in London. "The correction of the dollar to November lows tells us investors see greater value elsewhere as earlier and more aggressive Fed tightening, embedded in rising real yields, threaten to weaken the economy and deflate asset valuations." Inflation-adjusted 10-year U.S. yields are up 40 bps from the start of the year, threatening to undermine a stock market rally and weigh on economic prospects. Indeed, with hedge fund dollar positioning holding close to the highest levels since