Dollar Begins to Weaken, What's Happening Ahead of Important US Data?
The US Dollar Index (DXY) finally halted its five-day rally and hovered around 100.20 in Asian trading on Monday (November 24th). Market participants are now awaiting the release of US producer price inflation (PPI) data for September, due out next Tuesday, as this data could provide important clues to the Fed's future policy direction.
The dollar's weakening occurred after expectations for a Fed rate cut in December rose sharply. The chance of a 25 bps rate cut is now around 69%, much higher than 44% last week. Comments from Fed officials—from John Williams, who said a cut could happen soon, to Stephen Miran, who expressed readiness to vote for a cut—have also strengthened the dovish sentiment. However, not all officials are unanimous, as Boston Fed President Susan Collins has yet to make a decision.
In terms of economic data, US consumer sentiment, according to the University of Michigan, rose slightly in November, although still lower than the previous month. Inflation expectations actually improved, with one- and five-year projections lower. This improvement signals that price pressures are starting to ease, further supporting the Fed's scenario of lowering interest rates in the coming months. (az)
Source: Newsmaker.id
