The US dollar is hedging down against other major currencies during early Wednesday trading, carrying the momentum of the previous session. The greenback sank to the lowest level in six months, after softer than expected US inflation numbers triggered a dollar sell off on Tuesday. With consumer prices giving clear signs of stabilization, investors started to price-in hopes of a more benign Federal Reserve.
The figures revealed that consumer prices rose less than expected for the second month in a row, strengthening the case for slower rate hikes, with the Fed now more likely to announce a 50 basis points increase later today, instead of previously assumed 75 bp. Against this background, there may be scope for further dollar weakness.
Ricardo Evangelista – Senior Analyst, ActivTrades
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