The dollar index (DXY00) on Tuesday fell by -0.22%. The dollar was undercut ahead of the results of the Tue/Wed FOMC meeting, where hopes have risen for the Fed to signal that it will start cutting interest rates next year. The dollar was also undercut by Tuesday’s decline in the headline U.S. CPI report to a 5-month low, although that was in line with expectations. The dollar saw underlying support from Tuesday’s -3.1 bp decline in the 10-year T-note yield.
The U.S. Nov CPI eased to +3.1% y/y from +3.2% y/y in Oct, in line with expectations. The Nov CPI report of +3.1% was the smallest increase in 5 months and was just slightly above June’s 2-3/4 year low of +3.0%. The Nov core CPI report of +4.0% y/y was in line with expectations and was unchanged from October’s 2-1/4 year low.
