Just before knowing the inflation data in the US and the eurozone scheduled for this week, investors are unwinding long positions in the US currency.
The dollar is on a rollercoaster this Tuesday, hitting a three-month low against a basket of six major currencies before stabilizing. Traders, in a continuous movement, undo long positions in the US currency, anticipating US inflation data and the euro zone scheduled for this week.
The dollar index managed to advance 0.1%, standing at 103.2 units, moving away from its minimum of 103.15 recorded during Asian operations, a level not seen since August 31. However, this month of November is shaping up to be challenging for the currency, with a possible loss of more than 3%, which would mark its worst monthly performance in a year.
“Markets want to anticipate what’s next on the agenda – monetary easing, improvements in conditions for risk assets and the weakness of the dollar – but as we see this morning, it seems that that anticipation is losing steam,” he says. Simon Harveyhead of currency analysis at Monex Europe.
Dollar vs. other currencies
“In the short term, we continue to monitor general market sentiment (the predominant trend this month is long positions in stocks and short positions in dollars) and these psychological levels: the euro has touched $1.0960, but every attempt during the last week has been thwarted“he adds.
Both the euro and the pound sterling maintain slight stability, trading around 1.09495 and 1.2627 dollarsrespectively, remaining close to the highs recorded in the last three months.
The market’s expectation of the end of the interest rate hike cycle by the Federal Reserve puts further downward pressure on the greenback. The CME’s FedWatch tool shows a roughly 25% chance that the U.S. central bank will begin cutting rates in March, rising to nearly 45% in May.
Traders are looking forward to the US Personal Consumption Expenditure (PCE) price index, the Fed’s preferred measure of inflation, due out this week. They are looking for confirmation about the slowdown in inflation in the world’s largest economy.
The yen, for its part, remains stable, trading at 148.63 units per dollar, continuing its recovery from levels close to 152 recorded at the beginning of the month due to the weakness experienced by the dollar.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
