US Dollar retreats from one-year peak after inflation data, FOMC Minutes

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US Dollar retreats from one-year peak after inflation data, FOMC Minutes

On Wednesday, the US Dollar Index (DXY) measured against a basket of six major currencies on an average faltered from a one-year peak, as longer-termed US Treasury Yields dipped and US Consumer Prices Index rose robustly last month, while Minutes from September 21-22 US Federal Reserve policy meet had reported that a tapering of fiscal support could emerge as early as by mid-November, however, there were signs of debate among policymakers on when and how an ease of fiscal support could start off.

In point of fact, the American currency collapsed against most major and emerging market currencies on Wednesday, as US short-term Treasury Yields rose, but longer-dated Treasury Yields fell with 10-year Treasury bond notes tumbling to 1.53 per cent after hitting 1.6 per cent followed by the release of US Consumer Prices Index data.

US Government data had unveiled earlier in the day that US Consumer Prices rose by 0.4 per cent last month, topping an analysts’ estimate of a rise of 0.3 per cent, while over past twelve months through September, US Consumer Prices Index jumped as much as 5.4 per cent with foods’ prices rising as much as 0.9 per cent, the highest monthly increase since mid-2020, eventually putting pressure on the US Federal Reserve to tackle a persistent rise in inflation indicators while downsizing a safe-haven bet for the US Dollar.

Aside from that, debates over US debt-ceiling had fanned up the flames on whether the US economy could be contemplated as a safe-haven, easing investors’ bet on a roaring American currency.

US Dollar falter from one-year peak after FOMC Minutes, inflation data

Citing statistics, in the day’s FX market round off, the US Dollar Index (DXY) tumbled as much as 0.54 per cent to 93.98, while safe-haven Japanese Yen added 0.28 per cent to 113.28 yen per Dollar against its American counterpart and Swiss Franc climbed as much as 0.75 per cent to $0.9236 against the greenback.

The bloc’s common currency euro, shared among 19 Eurozone member states, soared 0.55 per cent to $1.1594 against its American peer, while British Pound added 0.54 per cent to $1.3661. Meanwhile, addressing to Minutes from September 21-22 US Fed policy report which had hindered progress in US Treasury Yields alongside the greenback, a head of G10 FX research at Credit Agricole, Valentin Marinov, said, “Today’s FOMC minutes release could confirm that a November taper announcement may be hard to resist for the Fed, but also that there were discussions of the potential impact from further tightening of U.S. and global financial conditions.