Dollar Gains Ahead of CPI

10 Dec 2024 , 08:29 AM

As traders anticipated a U.S. inflation report the next day for more hints on the direction of Federal Reserve policy, the U.S. dollar pushed to its highest level this month against the yen on Tuesday.

Following Monday’s recovery from a four-month low, the Australian dollar maintained steady ahead of a central bank interest rate announcement later in the day.

The New Zealand dollar gained 0.57% in the previous session before falling 0.33% to $0.5846.

Sterling fell 0.03% to $1.2748, while the euro fell 0.05% to $1.0549.

At 106.22, the U.S. dollar index, which compares the currency to the euro, sterling, yen, and three other significant rivals, increased by 0.06%.

This week’s key events for investors, other from the U.S. CPI, are China’s closed-door Central Economic Work Conference and the European Central Bank meeting on Thursday, which is expected to include a quarter-point decrease.

The U.S. dollar had gained 0.16% to 151.45 yen after briefly reaching 151.55 for the first time since November 28.

The consumer price index, which is expected on Wednesday, may provide some insight into how much leeway policymakers have for easing next year, even if markets have priced in a quarter-point Fed rate decrease on December 18 as a near certainty.

Although U.S. job growth jumped in November, according to data released Friday, the unemployment rate increased to 4.2%, suggesting that the labour market is cooling and that the Fed may be able to lower interest rates this month.

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