US Dollar Strengthens Amidst CPI Data

11 Dec 2024 , 09:02 AM

Ahead of a much-awaited U.S. inflation report that may offer hints about the rate at which the Federal Reserve may lower interest rates, the dollar nearly hit a two-week high against the yen on Wednesday.

Following a dovish shift in the central bank’s policy outlook the day before, the Australian dollar fell close to a four-month low. The New Zealand dollar also suffered from it, lingering close to a one-year low.

The headlines from China’s closed-door Central Economic Work Conference, which takes place this week, will also be watched by investors.

Although Tuesday’s dovish Reserve Bank of Australia speech overshadowed Beijing’s pledge of further fiscal and monetary support for the economy next year, the anitipodean currencies saw a lift at the beginning of the week. Later on Wednesday, RBA Deputy Governor Andrew Hauser is scheduled to give a speech.

As of 00:45 GMT, the dollar had dropped 0.12% to 151.80 yen, although it was still near the overnight high of 152.18 yen, which was its highest level since November 27.

After hitting a one-week high of 106.63 the previous session, the dollar index, which compares the currency to the yen and five other major peers, remained stable at 106.36.

Currently, traders give a quarter-point rate cut by the Fed on December 18 85% of the time.

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