Why is the dollar going down? Although November was the dollar’s worst month in 12 years and it has continued to fall since then, strategists calculate that all is not yet lost, especially with the increased risk of recession, as the dollar still enjoys its reputation as a “safe haven,” writes Business Insider.

The value of the dollar is going down after market expectations of a slowdown in rate hikes by the U.S. Federal Reserve increased. However, it has a good chance of rising next year. The euro is gradually recovering its position in the euro/dollar pair.

The U.S. Dollar Index, which tracks its exchange rate against a basket of 6 other currencies, posted its worst gain in 12 years in November, falling more than 5%. It fell another 0.8% in December, and before that, it was up 17% during the January-September period amid a sharp rate hike.

This is because a rising rate keeps the value of the dollar afloat, which attracts foreign investors seeking higher yields.

The Fed has raised the rate by 75 basis points at each of its last 4 meetings. But now it is expected to slow down and raise rates by just 50 basis points in December after inflation fell slightly in October.

Because of its relative price stability, the dollar will continue to be seen as a haven asset in times of heightened economic and geopolitical uncertainty, particularly the risks of a global economic slowdown and lingering disruptions caused by the conflict in Ukraine.

Earlier we reported that the Eurozone GDP growth estimate was raised to 0.3% in Q3.