Investing.com – The US dollar edged higher on Tuesday, trading in tight territory ahead of Wednesday's expected consumer inflation report for November, while the euro slipped slightly ahead of its ' last policy meeting at the European Central Bank.
At 05:15 ET (10:15 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, was trading 0.2% higher at 105.995.
CPI is getting big
Movements in the foreign exchange market have been limited this week, ahead of the release of US data for November on Wednesday, as this is likely to provide more insight into the Federal Reserve's interest rate path.
The report is expected to show that the annual headline figure rose to 2.7% in November, up from 2.6% the previous month, and the 'core' figure, which is ' excluding volatile food and energy components, in at 3.3%. unchanged from October.
The Fed has cut interest rates by 75 basis points since September and markets are currently expecting another 25-bps cut at the December 17-18 meeting.
However, any signs that progress in returning inflation to the Fed's 2% target has stalled would likely see markets revising expectations.
“We doubt investors will want to run the DXY too far lower ahead of tomorrow's US CPI number and would expect support at 105.40/60 to hold on a closing basis,” analysts said. analysis at ING, in a note.
Euro slips ahead of ECB meeting
In Europe, it slipped 0.2% to 1.0530, after remaining flat at 2.4% in November, confirming preliminary data, ahead of Thursday's policy setting meeting with the European Central Bank, the policy meeting about end of the year.
They are widely expected to agree to another 25-bps rate cut, the fourth such cut this year.
Such a reduction appears to be a deal ready for the market, ING said, but “the press conference could open the debate for more cuts later, meaning a dovish result for EUR. ”
trading largely unchanged at 1.2748, with sterling holding up reasonably after data showed that vacancies dried up faster in the UK than in other similar countries over the past year.
Recruitment platform Indeed data showed that there were 23% fewer jobs advertised on the platform in Britain on November 29 compared to a year earlier, adding to signs that the British economy was losing ground in second half of this year.
The rate cut in November is for the second time in 2024, and it is seen easing monetary policy more slowly than its main rivals in 2025.
Australian dollar near four-month low
In Asia, it slipped 0.6% to 0.6399, hovering near a four-month low after interest rates were kept steady at 4.35% in their December policy meeting, citing sticky inflation and market strict work.
edged higher to 7.2612, after trade data from China sank. While the country rose in November, both exports and imports read weaker than expected.
China has pledged to implement more proactive fiscal stimulus measures and adopt easier central monetary policies in 2025, and the focus is now on China's Central Economic Work Conference, which is about to begin Wednesday.
it gained 0.3% to 151.59, after earlier climbing to 151.71 for the first time since November 28.
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