The US dollar plunged lower after again being surprised by readings of US inflation data which continued to show a reduction in November.
This in turn strengthens the expectation that the Federal Reserve (Fed) will slow the rate of increase in its interest rate at the FOMC policy meeting that takes place early Thursday morning.
Surprising markets broadly, the US annual consumer price index (CPI) rose 7.1% in November which was lower than expected for a 7.3% increase.
The recorded reading also marked a decline from October's reading of 7.7%, marking a 5-month decline from its peak recorded in June of 9.1%.
The greenback plunged to six-month lows against the euro and pound following the release of the data, rising to around 1.0673 and 1.2443 respectively.
Investors are now turning their attention to the release of UK inflation data in the European session to determine the future direction of the pound and the outcome of the Bank of England (BOE) policy meeting on Thursday.
Meanwhile, the Aussie dollar jumped to a 3-month high and the New Zealand dollar hit a 6-month high against the weaker greenback.
Next, Thursday will be a busy trading session for investors with policy meetings from the 4 central banks namely the Fed, BOE, Swiss National Bank (SNB) and European Central Bank (ECB).
