Dollar slides to three-month trough ahead of US growth data

Economies.com
2023-11-29 11:07AM UTC

Dollar declined in European trade on Wednesday against a basket of major rivals, sharpening losses for the fifth day in a row and plumbing a three-month trough as investors sell off the dollar and US treasury bonds.

 

Now investors await crucial US data later today on third quarter GDP growth to determine the likely path ahead for policies. 

 

The Index

 

The dollar index fell over 0.25% to 102.47, the lowest since August 10, with a session-high at 102.81, after losing 0.5% yesterday, the fourth loss in a row following bearish remarks from Fed officials. 

 

US Yields 

 

US Yields 10-year treasury yields fell 1.6% to 4.257%, the lowest since September 14, with a session-high at 4.326%. 

 

The yields lost 1.5% on Tuesday, the second loss in a row following bearish remarks by Fed officials. 

 

Cautious Remarks 

 

Fed member Christopher Waller, a usual hawk, said the Fed is on track to bring inflation back to the 2% target.

 

Fed Chicago President Austen Goolsbey said that inflation has slowed rapidly this year, while New York President John Williams lauded the recent drop in prices as monetary tightening measures bear fruit. 

 

US Rates

 

Following the remarks, odds for a US interest rate hike at the December 13 meeting stood at just zero. 

 

Odds for an interest rate cut by the Federal Reserve in March 2024 surged from 21.5% to 40%. 

 

Now investors await US GDP growth data later today, expected to clock in a 5% growth rate in the second reading, up from 2.1% in the second quarter. 

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