The dollar hit a three-month low against a group of other currencies before stabilizing, as traders continued 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 3 percent in November, its worst performance in a year.
Simon Harvey, senior foreign exchange analyst at Monex Europe, said: “the markets want 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 assets yielding yields showed that there is a chance of about a 25 percent chance that the Fed will start cutting interest rates as early as March, according to the FedWatch tool of the”C.Em.E.”. Traders are now waiting for the data on the US core Personal Consumption Expenditures price index, the Federal Reserve’s preferred measure of inflation, expected this week for further confirmation that inflation in the world’s largest economy is slowing down. The Japanese yen settled at 148.63 to the dollar, continuing to recover from the 152-dollar edge recorded earlier in the month.
The Swiss franc recorded 0.8810 to the dollar, stable, which is also close to the highest level since the beginning of September. The Australian dollar briefly touched a four-month high at 0.6632 dollars.
