The US dollar started trading calmly earlier in the week as investors ’focus is now focused on several policy meetings from major banks, including the Federal Reserve (Fed).
The giant slipped lower at the end of last week's trading after seeing slightly slower inflation growth in November. However, the 10 -year US treasury yield was seen soaring to the level of 1.50%.
The depreciation of the USD may be due to profit -taking by investors before the close of trading last week, thus leaving room for most major currencies to rise.
The US consumer price index (CPI) recorded a lower -than -previous increase of 0.8% from 0.9%. Meanwhile, the core inflation reading was in line with expectations with a slight decline to 0.5% from 0.6% previously.
However, in contrast to annual inflation which recorded a higher reading than the previous reading, to 6.8% from 6.2%.
This indirectly strengthened market confidence in the Fed to accelerate the reduction of its monthly asset purchases and pave the way for faster rate hikes.
Meanwhile, the pound took advantage of the weakening greenback dollar to rise although on the other hand, investors were squeezed by concerns over the rising Covid-19 case and Prime Minister Boris Johnson’s warning also warned of a new variant of Omicron.
The euro, meanwhile, moved steady around the 1.1300 price level against the greenback, slightly down from its gains on Friday.
Meetings of the central banks of the US, England, Europe, Japan and Switzerland will decorate the market this week by being the main movers to the currency.
