2023-11-28 10:44:00
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Investing.com – The US dollar rose in early European trade on Tuesday, but remained near a three-month low, as traders awaited key inflation data amid growing conviction that the Federal Reserve has completed its rate-hiking cycle.
At 13:40 Riyadh time, the dollar index, which tracks the US currency against a basket of six other currencies, rose 0.01% to 103.117, and is trading just above its lowest level since August 31.
The dollar was on track to lose more than 3% in November, its worst monthly performance in a year.
Consumer expenditures inflation data in focus
The dollar fell on Monday after data showed US new home sales fell 5.6% in October, signaling a slowdown in the US economy and supporting bets that the Federal Reserve will vote on the federal government’s decision. It is possible that the reserve will begin reducing interest rates in the first half of next year after ending the cycle of raising interest rates at the beginning of this month.
However, this theory is likely to be tested with the release of another US inflation report on Thursday.
The Fed’s preferred measure of inflation is expected to rise 0.1% in November, down from 0.4% in September.
Income, which excludes food and fuel costs and is considered a better measure of core inflation, is expected to rise 3.5% year-on-year, down from 3.7%. % in the previous month, and the lowest since mid-2021.
European consumer confidence returns
It fell 0.1% to 1.0947, in Europe, but remained near its highest levels since mid-August with the release of consumer confidence data and French, which indicates a slight improvement.
The latest EU inflation data is due later this week and is expected to show easing pressures.
However, the head of the European Central Bank said on Monday that the battle to contain price growth is far from over.
“This is not the time to start declaring victory,” Lagarde said during a meeting of European Union lawmakers in Brussels. “We need to remain attentive to the various forces affecting inflation and remain firmly focused on our mission of price stability.”
Also, it rose slightly to 1.2626, trading near its highest level in more than two months.
Yen rises ahead of data deluge
It traded marginally lower at 148.64, in Asia, as the yen received support from continued dollar weakness.
However, the Japanese currency may experience some turmoil depending on the results of this week’s inflation data from the US, as well as readings and ecl-261} readings from Japan.
USD was trading flat at 7.1526, with the focus this week squarely on November, due for release on Thursday. The readings are expected to show continued weakness in business activity after a set of disappointing October readings.
It rose marginally to 0.6607, after the Australian index unexpectedly shrank in October, prompting some bets that inflation will trend lower in the coming months.
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