USD declines to 3-month lows
Daily Currency Update
The US dollar has reached a three-month low against a basket of major currencies, having declined overnight due to lower-than-anticipated new home sales data. The USD decline has been supported by traders anticipating a potential move by the Federal Reserve to reduce interest rates in the first half of the upcoming year.Attention now turns to the US core personal consumption expenditures (PCE) price index, which serves as the Federal Reserve's favoured gauge of inflation. We are looking to this indicator for additional confirmation that inflation in the world's largest economy is indeed decelerating.
Key Movers
Yesterday, the euro experienced a 0.2% increase against the US dollar. Over the course of the month, the euro has demonstrated a gain of approximately 3.6%, signalling its most substantial monthly ascent in a year.Despite European Central Bank President Christine Lagarde's statement that inflation pressures in the eurozone are diminishing while wage growth remains robust, the euro, as the region's single currency, exhibited minimal response. Lagarde emphasized that the ECB's efforts to curb inflation are ongoing.
Expected Ranges
- GBP/USD: 1.2575 - 1.2655 ▲
- GBP/EUR: 1.1505 - 1.1565 ▲
- EUR/USD: 1.0915 - 1.0985 ▲