The dollar’s setback came after inflation reports in the United States reflected stability in consumer prices during October.
The dollar index, which compares the greenback with a basket of six prominent currencies, shows a slight recovery of 0.16%, reaching 104.26 units, still close to the two-month minimum recorded the previous day, standing at 103. 98.
The foreign exchange market is experiencing significant fluctuations due to recent signals that suggest a possible change in the policies of the US Federal Reserve. After a sharp fall of the dollarthe US currency shows signs of recovery in the current day, although it remains at relatively low levels.
The dollar’s setback came after U.S. inflation reports showed stability in consumer prices through October, while annual growth in core inflation hit its lowest point in two years. These data, which show an increase in the CPI of 3.2% in the last twelve months until October, below expectations and the 3.7% registered in September, generate expectations about a possible reconsideration of monetary policy decisions.
Michael Hewson, chief strategist at CMC Markets, expresses concern about interest rate hikes, suggesting they may have stopped and the market is contemplating cuts in the future. This perspective especially impacts the bond marketwhere significant reactions occur.
Dollar against other currencies
The dollar index, which compares the greenback with a basket of six prominent currencies, shows a slight recovery of 0.16%, reaching 104.26 units, still close to the two-month minimum recorded the previous day, standing at 103. 98.
Meanwhile, other currencies are also experiencing movements. The pound sterling, affected by the slowdown in inflation in the United Kingdom, fell 0.3% to $1.2464. The euro lost 0.3% to $1.0848, having hit its highest point since August during the previous session.
In the case of the pair dollar/yen, shows an advance of 0.1%, standing at 150.52 units, despite the contraction of the Japanese economy in the period from July to September. However, analysts predict that Japanese government intervention and a drop in US Treasury yields could limit the yen’s weakness in the near term.
Moh Siong Simcurrency strategist at the Bank of Singapore, mentions that despite these factors, the dollar/yen is likely to remain in an established range, considering the stance of the Federal Reserve and other economic elements that influence the current situation of the exchange market.
Source: Ambito
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