Dollar jolts after US inflation data as talks over less hawkish Fed float in thin air

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Dollar jolts after US inflation data as talks over less hawkish Fed float in thin air

On Thursday, the US Dollar Index (DXY) measured against a basket of six major currencies on an average had been met with a hefty whiplash of 2.23 per cent to 107.87, while the American Dollar fell across the board against all major and emerging market currencies, as talks over a less hawkish Fed seem to be scaling higher following release of October inflation data.

In the matter of the fact, Thursday’s sharp downward spiral in American currency comes over the heels of a marginal decline in US CPI (Consumer Price Index), while both main street and institutional traders appeared to be betting in favour of a less hawkish Fed on its December policy meet, which eventually had added to a holocaust on US Dollar.

Apart from that, US Labour Department data released earlier in the day had unveiled that US Consumer Price Index fell to 7.7 per cent last month on an annualized basis after rising unexpectedly last month, however, US households had little rooms to breathe as a choking increase in housing expenses alongside rents had accounted for a half of the increases in October US CPI.

Fuelling up the worries of a US recession as early as by early-2023, petroleum prices spiked last month after three straight months of decline, while Fed’s Mester had indicated that the US Central bank has been failing to grapple with a gruelling upsurge in inflation indicators, eventually prompted investors to gamble on a hawkish US Fed stance.

Dollar pounded as Yen, Sterling post largest daily gains in years

Citing statistics, in the day’s FX market wind-down, the US Dollar Index tumbled 2.23 per cent to 107.87, while the bloc’s common currency euro jumped as much as 1.93 per cent to $1.020 against its American counterpart and British Pound snowballed as much as 3.21 per cent to $1.1713.

However, Euro is still 10.23 per cent down year-to-date against its American peer. Russian Rouble strengthened further to 60.41 rouble per Dollar. Apart from that, Japanese Yen climbed 3.71 per cent to 140.93 yen per Dollar, while safe-haven Swiss Franc gained 2.09 per cent to $0.9637 against the US Dollar.

Risk-sensitive Aussies jumped 2.94 per cent to $0.6620 against its American counterpart.