On Monday, November 9, the dollar became the weakest currency among the majors. The DXY index was losing almost 0.4%, and in the session lows it went below 102.00.
DXY is the dollar's exchange rate against a basket of currencies of the US's main trading partners. It shows the strength of the dollar as a whole, not against a single pair.
The reason is news on Iran. For a trader, this is the main move of the day: the dollar drags all major pairs, gold and oil with it.
Where were the prices?
Snapshot at 16:18 Moscow time. The move ran across key assets at once.
- USD/JPY - pulled back toward 158.00
- AUD/USD - held around 0.6900
- Gold - added more than 1% and rose above $4,100
- WTI oil - slid to $87, the area of two-month lows
Why did the market exit the dollar?
The trigger is diplomacy.
- Meeting at the White House. Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani meets with Donald Trump and Vice President JD Vance on Monday to discuss the progress of the negotiations.
- Trump's words. On Sunday he said that new strikes on Iran are extremely unlikely to be ordered while attempts to end the conflict are ongoing.
- China's signal. The extension of the suspension of 24% tariffs on American goods kept the Australian dollar supported.
The market reads this as a reduction in risk and exits the safe-haven dollar.
Risk appetite rose more broadly. European indices were adding from 0.7% to 1.4% by midday, US index futures pointed to a higher open. Cheaper oil also removed some of the concerns about refinancing the artificial intelligence theme.
Why is this not a crash?
The dollar is being held up by data. Strong US employment data last Friday and the market's raised bets on a Fed rate hike in December keep it from a deeper decline.
- November 4 - DXY was losing about 0.5% and reached 101.35
- 101.35 - a four-week low, set by the Democrats' victory in the midterm elections
What's next?
The next fork is Tuesday. The US consumer price index is released; the release time is in the economic calendar.
The inflation figure will determine whether the December rate scenario, on which the entire dollar currently rests, holds up.
Key point: the dollar is now holding on headlines from the White House and on expectations for the December Fed rate. For this kind of trading, it's better to pick a challenge in advance.
Did you hold the dollar this Monday?
A day like this in forex is a series of trades: a pullback in USD/JPY, an exit from gold, a reaction to headlines from the White House. Tomorrow brings US inflation, and within half an hour the dollar will see all the most interesting action. Some prop programs prohibit holding a position into a data release, some count the minutes to the release, and some live off it. The rules on trading the news and daily drawdown are read before paying for the evaluation. Selection by market and style will filter out programs where your approach is against the rules.