Dollar sharpens decline to four-month lows after Powell's speech

Dollar declined in European trade for the second straight session against a basket of major rivals, plumbing four-month lows after Fed Chair Jerome Powell's speech, which bolstered the case for a 0.5% rate hike in December. 

Later today, investors await important US data on consumer sending in October and unemployment claims. 

The Index

The dollar index fell 0.55% to 105.30, the lowest since August 12, with a session-high at 105.89.

The dollar index closed down 0.9% yesterday, the first loss in four days after Powell's bearish remarks. 

The dollar index lost 5.1% in November, the second monthly loss in a row, and the largest since September 2010 as inflation slowed down. 

Powell 

Fed Chair Jerome Powell said the pace of rate hikes will be slowed down starting from the December meeting as the bank rebalances its risks.

Following the remarks, markets now put an 80% chance of a 0.5% rate hike by the Fed in December, and a 20% only for a 0.75% rate hike.

Data

Now markets await a basket of important data later today on US consumer spending and unemployment claims to gauge the next Fed move. 

Such data will offer important clues on the health of the economy in the fourth quarter of the year after growing by 2.9% in the third quarter, a brisk and forecast-beating pace, exiting contraction in the first half of the year.