FX.co ★ Dollar Down to Over 4-Month Lows

The dollar index weakened for the third straight session on Monday, declining to approximately 97.2, marking its lowest level in over four months. This follows last week’s 1.9% drop, the steepest weekly decline since April. The ongoing “sell America” trend continues to weigh on the dollar, amid increasing speculation that US and Japanese officials might collaborate on foreign-exchange intervention to bolster the yen. Concerns are also rising about a potential government shutdown, spurred by Democratic leaders’ threats to block a $1.2 trillion funding package unless it excludes additional funds for Homeland Security, in response to yet another shooting incident in Minnesota involving a US citizen. Additionally, investors are keenly awaiting the Federal Reserve’s inaugural monetary policy decision of the year scheduled for Wednesday. Although a rate hold is largely anticipated, traders will pay close attention to the Fed’s economic projections and its commentary on future rate policies. Furthermore, there is conjecture that the announcement of the next Federal Reserve chair could occur as early as this week.