The dollar hit a three-month low against a group of other currencies today before stabilizing, as traders continue to correct their long-term trajectories with the dollar ahead of the release of inflation data from the United States and the eurozone this week.
The dollar index, which measures the performance of the US currency against six other major currencies, recorded 103.2 in the latest reading, rising about 0.1 percent during the day, rising slightly from the lowest level since August 31 of 103.15, which it touched in Asian trading.
The index is heading for a loss of more than three percent in November, its worst performance in a year.
Simon Harvey, senior foreign exchange analyst at Monex Europe ,said:”markets would like to anticipate the next big events, namely monetary easing, improving conditions for high-risk assets and a weakening dollar, but as we saw this morning this is starting to dissipate.
The euro and the British pound were broadly stable at 1.09495 dollars and 1.2627 dollars, respectively, both close to the highest level in about three months. The dollar also came under pressure from market expectations of the end of US interest rate increases.
Futures contracts for us yielding assets showed that there is almost a 25 percent chance that the US Federal Reserve will start cutting interest rates as early as March, according to the C. S. FedWatch tool.Em.E. E.
Traders are now waiting for the data on the US core PCE price index, the Fed’s preferred measure of inflation, due this week for further confirmation that inflation in the world’s largest economy is slowing down.
