In trading on January 16, the dollar index fell by 0.97% to 101.77 points. The indicator was last traded at this mark on June 3, 2022. The index fell to its lowest level in six months amid weakening inflation expectations in the United States. Investors are selling the dollar in anticipation that the U.S. Federal Reserve will slow down the pace of monetary tightening, Bloomberg writes.

According to the agency, traders now expect the Fed’s interest rate to peak at 4.94% compared to expectations of more than 5% earlier. The Bloomberg Dollar Spot Index was down 0.4% at the moment and hit its lowest since April 2022.

“It’s only been two weeks into the new year and already it looks like the main 2022 ‘buy the dollar’ deal is turning into a hot down trade,” noted Patrick Bennett, a strategist at Canadian Imperial Bank of Commerce in Hong Kong.

He added that in addition to the U.S. Federal Reserve, the trend reversal is being pushed by the loosening of coronavirus restrictions in China, which are happening more rapidly than expected.

National Australia Wonk strategistRodrigo Catril noted that the dollar is under pressure as market confidence grows that the Fed will pause. He also emphasized that as risk appetite grows, the yuan’s rise becomes “no less important” for commodity-linked currencies such as the Australian dollar.

“Perhaps dollar buyers will fight back, but so far the decline in the DXY index is playing to the growth of other world currencies, as well as the rise in commodity futures, including a local rally in gold,” said BKS World Investments expert Michael Zeltser.

He also added that the principal level for the U.S. currency to the ruble is 67.5 rubles, writes RBC. If the rate breaks through this level and fixes by the end of the session below this technical mark, it will open the way to further strengthening of the ruble to 65 rubles per dollar, Zeltser said.