USD is predicted to decline because of the Fed, this is what traders need to understand!

<p>&nbsp;The US dollar continued to trade weakly towards the end of the week, hovering at its lowest level since April 2022 following the market's view of the central bank's monetary policy after examining the latest economic data.</p><p><br /></p><p>After consumer inflation became the focus last Wednesday, the New York session on Thursday yesterday also assessed the United States (US) producer price index (PPI) reading which saw producer inflation in June record the lowest annual reading since August 2020.</p><p><br /></p><p>Adding pressure to the US dollar after the dismal data published this week, the market expects interest rate hikes by the Federal Reserve (Fed) previously proposed to be reduced to just one.</p><p><br /></p><p>At the beginning of last week, policymakers also saw the policy tightening phase as starting to come to an end, and with the release of the latest inflation data, that view is further strengthened.</p><p><br /></p><p>Thus, the US dollar is seen as more likely to remain with its dismal performance while the focus of investors in the last session of the week will be directed at US consumer confidence sentiments with survey data to be published at 10pm later.</p><p><br /></p><p><br /></p><p>Other major currencies still have room to recover their trading value, but investors will be more cautious with the risk of profit taking activities at the end of the week.</p><p><br /></p><p>The Euro and Pound each rose to their latest highs since March and April 2022 against the US dollar this week.</p><p><br /></p><p>Commodity currencies also did not miss to show strengthening with the Australian dollar to the latest 4-week high, while the New Zealand dollar to the highest level since last February.</p><p><br /></p><p>The yen also managed to strengthen against the US dollar to a 7-week high while the Canadian dollar hit a 10-week high.</p><p><br /></p><p>Gold trading, however, was not very aggressive in yesterday's trading, more flat in the $1,960 price zone.</p>