The dollar is headed into 2023 on a more downbeat note as the pace of Federal Reserve interest-rate hikes begins to slow amid signs that inflation risks are beginning to lessen.
The Bloomberg dollar index notched biggest quarterly decline since 2010 and trading around its lowest level in six months after beating a hasty retreat from the record high it hit on Sept. 28. It slid another 0.4% Friday, the year’s final trading day, at one stage reaching the lowest mark since June. Yet while the greenback is down more than 8% from its peak, the currency is still up more than 6% since the end of 2021, the best year-on-year performance for the gauge since 2015.
Among Group-of-10 currencies, the New Zealand dollar and the Norwegian krone have been the standouts this quarter, each climbing more than 10%. But perhaps the most notable about face has been the yen, which has rebounded sharply in the wake of a policy shift from the Bank of…
