Dollar Falls on Tuesday
The dollar index weakened to 102.3 on Tuesday, retreating from 102.6 in the previous session, its highest level in 18 months. The pullback came as oil prices and US Treasury yields declined, while a tech-led sell-off boosted safe-haven demand. Investors are also awaiting key US inflation data this week, including Wednesday’s CPI report, for further clues on the inflation outlook and the Fed’s next policy steps. Meanwhile, traders have scaled back bets on another 25bps rate hike this month, with the probability of such a move standing at around 19%. For December, markets are pricing in a nearly 72% chance of a 25bps increase in the fed funds rate. The greenback weakened broadly, with its steepest losses against the yen after Japan’s wholesale inflation came in below expectations. However, persistent price pressures continued to reinforce expectations of further Bank of Japan rate hikes.
6 in the previous session, its highest level in 18 months. The pullback came as oil prices and US Treasury yields declined, while a tech-led sell-off boosted safe-haven demand. Investors are also awaiting key US inflation data this week, including Wednesday’s CPI report, for further clues on the inflation outlook and the Fed’s next policy steps. Meanwhile, traders have scaled back bets on another 25bps rate hike this month, with the probability of such a move standing at around 19%.
For December, markets are pricing in a nearly 72% chance of a 25bps increase in the fed funds rate. The greenback weakened broadly, with its steepest losses against the yen after Japan’s wholesale inflation came in below expectations. However, persistent price pressures continued to reinforce expectations of further Bank of Japan rate hikes.