The dollar fell against a basket of major currencies, hitting its lowest level in nearly five months after data showed annual inflation in the United States slowed in November, reinforcing market expectations for a U.S. interest rate cut next March.
In the twelve months to November, the inflation rate, according to the PCE price index, was 2.6% down from 2.9% in October .
Excluding volatile food and energy components, the core PCE price index rose 3.2 percent year-on-year in November, the smallest increase since April 2021. The Federal Reserve is closely monitoring price measures of personal consumption expenditures in the hope of bringing inflation to its target level of 2%.
The dollar index in the latest transactions fell 0.13% to 101.65, its lowest level since late July. The index has fallen by more than two percent over the past two weeks and is heading to end the year on a decline of just under two percent.
