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After hawkish Federal Reserve policy sparked a dramatic decline for the US dollar, the currency is now on pace for its most significant monthly slump since September 2010, Dow Jones Market Data shows. 

The greenback shed 4.2% in November, against a plethora of other currencies, according to the WSJ Dollar Index. Meanwhile, the British pound soared more than 4% in November, the euro surged roughly 4.2%, and the Japanese yen skyrocketed more than 5.9%. 

Since central bankers have launched aggressive monetary policy tightening path over the last year, the dollar has surged. In late September, the currency was up more than 16% on the year. After this month's sharp plunge, the dollar is up more than 10% in 2022. 

The recent selloff signals a sea change among investors, who until recently had flocked to the greenback, a traditional safe haven. 

That shift gained momentum after the October CPI report earlier this month showed inflation cooled faster than expected, raising hopes the Fed would start easing the pace of rate hikes and dragging on the dollar's strength. 

Meanwhile, Fed Chair Jerome Powell is scheduled to speak Wednesday afternoon, which could provide further clues for the December 13-14 policy meeting.

The Fed is widely expected to raise rates by 50 basis points next month after four consecutive hikes of 75 basis points.