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The US Dollar (USD) currency index remained steady after the latest inflation data showed a better-than-expected decline, while the European Central Bank (ECB) kept interest rates unchanged.
At 10 am, the US Dollar Index (DXY) was at 98.447 points, up slightly by 0.03% since the opening of trading on Friday.
US Labor Department data reported that the Consumer Price Index (CPI) fell to 2.7% year-on-year in November – the lowest level since early 2021. This figure was much lower than analysts' forecasts for an increase to 3.1%.
The decline in inflation rates increased speculation that the Federal Reserve (Fed) may consider cutting interest rates in the future. However, investors remain cautious as employment data remained strong, including a stable unemployment claims report.
Meanwhile, the Euro weakened slightly in volatile trading after the ECB announced that it would keep its policy interest rates unchanged. The ECB also showed confidence in the resilience of the Eurozone economy despite global challenges.
Markets expect the ECB to continue to hold off on any rate cuts over the next two years, while weighing the risks more heavily on the downside than on the upside, based on the latest projections.
