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The perspective of inflation persisting for longer

The perspective of inflation persisting for longer

FOREX

The US dollar index is trading almost flat on the day, as the European session gets underway. The greenback had a poor run in November, with many expecting the Fed to pivot from its current hawkish stance towards a more market-friendly posture. However, recent positive US data showed the American economy is still running hot, generating conditions for inflation to linger. The perspective of inflation persisting for longer, alongside high interest rates, entails a scenario of a recession that brought investor expectations back down to earth, denting risk appetite. Against such a background November’s losses could be halted, and support could return for the haven dollar.

Ricardo Evangelista – Senior Analyst, ActivTrades

 

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