The US dollar looks set to end the week on the back foot
The US dollar looks set to end the week on the back foot, following the release of US inflation data on Thursday, which was lower than predicted. The greenback fell more than 2.5% in relation to other major currencies, and stock indices recorded their best day of recent times, as the mood in the markets shifted towards greater risk appetite. US inflation slowed down in October, raising the hopes of investors that the Federal Reserve will now reconsider the pace of its monetary policy tightening. With inflation finally under control many now expect a less assertive Fed in December, with many betting on a 50 basis points rate hike, instead of the previously expected 75 basis points. This shift in expectations, as well as the increase in investor risk appetite, are likely to create scope for further dollar weakness over the coming sessions.
Ricardo Evangelista – Senior Analyst, ActivTrades
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