Although the momentum faded a bit at the end of the week, the US dollar was seen to be performing well with the biggest weekly strengthening since September.
As assessed from the previous week, the main factor driving the strengthening of the US dollar is the sentiment of Donald Trump's election victory and the monetary policy of the Federal Reserve (Fed).
After a smaller interest rate cut is implemented for the November meeting, the Trump administration will affect the strengthening of the US dollar with policies regarding tariffs and the risk of a resurgence of inflation in the United States (US).
The situation is narrowing the scope for the Fed to implement further interest rate cuts as previously planned.
Furthermore, Fed Chairman Jerome Powell in his statement last week stated that the central bank does not need to rush to lower interest rates following the latest data showing that the economy is still moving strong.
Analysts who expect the strengthening of the US dollar to continue this week are likely to put continued pressure on other major currencies.
The euro, in particular, which has fallen to its lowest level since October 2023, is seen to be at risk of further decline.
The currency that made a surprise at the end of last week's trading was the Yen when it showed a sharp jump in the final sessions with analysts warning of the risk of intervention by Japan into the market.
Focus will be on Bank of Japan (BOJ) Governor Kazuo Ueda's expected speech earlier this week, which is likely to signal an interest rate hike in December.
The economic data throughout this week will be observed in addition to the focus will also be given to speeches by members of the central bank for further guidance.
