The post-election frenzy began to subside, and the rising trend of the dollar encountered "fluctuations".

Notice that, as the bullish sentiment sparked by the US election gradually fades, some key market indicators are beginning to suggest that the momentum for a Trump-induced rise in the US dollar may be stabilizing. Bloomberg's US Dollar Index fell for a third consecutive day on Tuesday after reaching its highest level in two years last week. Momentum indicators indicate that there may be limited room for further appreciation of the US dollar in the short term. Traders say that investor sentiment is no longer one-sided, and views on the pound are also becoming more cautious. Antony Foster, head of G10 spot trading at Nomura International in London, said, "The strong trend of the US dollar after the US election is undoubtedly entering a more turbulent phase." Since the end of September, global reserve currencies have been rising, partly due to President-elect Trump's plans to increase tariffs, leading to concerns that his agenda will drive up inflation and prevent the Federal Reserve from cutting interest rates. Bloomberg's US Dollar Spot Index has risen by 5.3% this year. From a technical perspective, the US dollar's Slow Stochastic Indicator (a momentum indicator) suggests that the dollar has entered the so-called overbought territory. Niraj Athavle, Head of Sales and Marketing at JPMorgan in Singapore, said that JPMorgan's EM FX Risk Appetite Index triggered a sell signal for the US dollar on November 15th. Investor views on the fundamentals of other major currencies are also a factor. The euro rebounded from a support level of 1.05 USD after a three-month decline. Additional technical support for the euro is located at the 2023 low of 1.0448 USD. Foster from Nomura Securities said, "Market sentiment towards the euro is currently very complex, with some believing the euro will fall to parity or lower, while others see this as a buying opportunity. We see many accounts covering their short positions in the euro, but not all accounts are doing so." Although Bank of Japan Governor Haruhiko Kuroda avoided explicitly hinting at a rate hike at the central bank's December meeting, the US dollar is still struggling to break through 105 Japanese yen. Foster said, "Most of the flows in yen are bidirectional." Strategist Garfield Reynolds said, "Based on relative yield dynamics, the US dollar has exceeded expectations in the post-election rally and will be difficult to return to recent highs in the short term." Even leveraged funds that initially increased bets on the US dollar against the euro, offshore yuan, and yen to rise after the US election seem to be reducing their bets on the US dollar's continued rise. Athavle from JPMorgan said, "Over the past week, there has been a net selling trend for the US dollar globally. Asset managers have had limited buying interest for the US dollar against the euro and pound, but this has been offset by macro hedge funds selling the US dollar against the euro." Of course, many on Wall Street are still touting the reasons for a strong US dollar. Hedge funds, asset managers, and other speculative investors have been preparing for further appreciation. According to the latest data from the US Commodity Futures Trading Commission as of the week ending November 12th, they hold around $17.7 billion in contracts, which are expected to benefit from the strengthening of the US dollar. Goldman Sachs strategists have abandoned their long-standing view of a depreciating US dollar this month, as they believe the dollar will remain strong in the "long term." They said that Trump's protectionist policies could reignite inflation and slow down the pace of interest rate cuts by the Federal Reserve, pushing the trade-weighted US dollar index up by about 3% over the next year. Although Morgan Stanley's team believes that the US dollar will remain range-bound by 2025, they expect the dollar to continue to climb this year. Forex trader Helen Given from Monex said, "The new government's domestic policies could keep the economy fairly hot, and trade policies could also add some upward pressure to the dollar. If these policies are not implemented or fail to work, the dollar still has some downside potential, but the risks for the dollar still lean towards the upside."