The safe-haven U.S. dollar weakened against other currencies on Tuesday, amid signs the Federal Reserve is raising interest rates that are already putting the brakes on the world's largest economy, while risk sentiment improved with Rishi Sunak set to become British prime minister. Sterling edged toward its highest this month, while the euro threatened to hit $0.99 for the first time since Oct. 6 ahead of a European Central Bank (ECB) policy meeting on Thursday. The yen held firm on the stronger side of 149 per dollar after two straight days of speculation over Bank of Japan (BOJ) intervention at the weekend. This week’s decline in long-term Treasury yields has also helped support the Japanese currency, but the policy backdrop for yen weakness is likely to ease in the coming days: the BOJ is widely expected to stick to its monetary stimulus on Friday, while the Fed is likely to raise interest rates by another 75 basis points on Wednesday next week. The dollar index, which measures the greenback against a basket of six major peers, fell to 111.78, near Friday’s low of 111.68, its weakest since Oct. 6. The greenback weakened after flash S&P PMI data overnight showed U.S. business activity contracted for a fourth straight month in October, the latest evidence of a slowing economy in the face of high inflation and rising interest rates. The 10-year U.S. Treasury yield fell to 4.217% in Tokyo, after hitting a multi-year peak of 4.338% late last week. At 149.00 yen, the dollar has fallen from a 32-year high of 151.94 on Friday that appeared to trigger a series of BOJ interventions. The dollar fell as low as 144.55 on Friday and 145.28 on Monday. “As a general rule, policymakers have their greatest impact on markets when they are transparent about their actions and intentions, so it is odd that they are refusing to confirm their interventions,” Joseph Capurso, currency strategist at Commonwealth Bank of Australia (OTC:CMWAY), wrote in a client note.



"The refusal to confirm intervention may reflect a desire to keep traders guessing and keep USD/JPY on the back foot. Whatever the tactic, we still expect USD/JPY to recover in the weeks after the BOJ intervention ends." US dollar rate Sterling added 0.24% to $1.13105, heading towards this month's high of $1.1493 from Oct. 5. The euro was up 0.16% at $0.98875. The ECB is likely to raise interest rates by 75 basis points on Thursday to try and control hot inflation. Elsewhere, the offshore Chinese yuan slumped to an unprecedented 7.3650 per dollar amid weakness after Chinese leader Xi Jinping's choice of leadership team at the Communist Party Congress twice a decade raised concerns that growth would be sacrificed to ideology-driven policies. US dollar rate News on the US dollar rate will continue to be updated along with other global economic news through the GIC Journal. Not only dollars, you will get other topics such as forex, oil, commodities, stocks, and others. Keep up to date with the news on GIC and trade with a small capital starting from 150,000 Rupiah with GIC!