Dollar wobbles near nine-months low as CPI data spurs up hope of a slower Fed path

The US Dollar Index (DXY) measured against a basket of six major currencies on an average fell marginally on Friday

by Sourav D
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Dollar wobbles near nine-months low as CPI data spurs up hope of a slower Fed path

On Friday, the US Dollar Index (DXY) measured against a basket of six major currencies on an average fell marginally after having been met with a tattering header a session earlier, as US inflation data had heightened up investors’ optimism that the US Fed might just sway away from its aggressive rate-hike path.

At this standpoint, futures’ markets across the US are betting on a 25-bps (basis percentage point) rate-hike from the US Fed at its January 31-February 1 policy meet, eventually easing a US Dollar buying frenzy. In the matter of the fact, both Friday’s and Thursday’s FX market were almost entirely galvanized by US inflation data released earlier in the week, while according to US Commerce Department, US Consumer Price Index (CPI) fell marginally last month, however prices of basic household items alongside foods continued to rise.

Nonetheless, December’s fall in US CPI coupled with a set of dismal ISM US flash composite PMI (Purchasing Managers’ Index) data had stepped up hopes of a less hawkish fed, repercussion of which had prompted investors to shrug off their Dollar ‘buy’ positions.

Dollar wobbles near nine-months low

Citing statistics, in the day’s FX market wind-down, the US Dollar Index (DXY) measured against a basket of six major currencies on an average fell 0.06 per cent to 101.79, while the bloc’s common currency Euro gained 0.03 per cent to $1.849 after hitting its highest level in nine months earlier in the session.

Pound Sterling closed out the session 0.08 per cent up to $1.221 against its American counterpart. Apart from that, the Japanese Yen added 0.12 per cent to 129.10 per Dollar, while risk-sensitive loonies like of Australian Dollar dipped 0.11 per cent to $0.6960.

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