The US dollar had its worst session in a year

15 nov. 2023

The US dollar had its worst session in a year, with the index that measures its performance against a basket of other major currencies dropping more than 1.5% on Tuesday. The sudden greenback weakness was triggered by the release of US inflation data for October, which was softer than expected and resulted in an increase in bets that the Fed’s hiking cycle is now truly finished. Expectations of an earlier rate cut also increased, with about 50% of market participants believing it will happen before June. The impact on the markets was immediate. Investors anticipated the perspective of lower rates, buying treasuries and causing a drop in yields, in a dynamic that compounded the dollar’s weakness. Against this background, the release of US PPI and retail sales numbers later today will be at the centre of investors’ attention. More disappointing data may induce further dollar softness.

Ricardo Evangelista – Senior Analyst, ActivTrades