The dollar fell against a group of significant competitors in European trade on Tuesday, escalating losses for the fifth day in a row and plunging below a three-month low as speculators dumped the currency and US Treasury bonds.
Investors are currently awaiting important US data on GDP growth in the third quarter later today in order to predict the likely course of future policy.
The Index
The dollar index lost 0.5% yesterday, the fourth loss in a row as a result of negative comments made by Fed members. It dropped more than 0.25% to 102.47, the lowest since August 10, with a session high of 102.81.
US Yields
US Treasury 10-year rates dropped 1.6% to 4.257%, the lowest level since September 14; they had reached a session high of 4.326%.
Tuesday's 1.5% decline in rates was the second straight after Fed policymakers' pessimistic comments.
Cautionary Statements
The Fed is on course to return inflation to the 2% objective, according to Fed member and regular hawk Christopher Waller.
While New York President John Williams applauded the recent price decline as evidence that monetary tightening efforts are having an impact, Fed Chicago President Austen Goolsbey stated that inflation has slowed significantly this year.
US Exchange Rates
After the comments, there was virtually no chance that the US will raise interest rates at the meeting on December 1.
The likelihood of a Federal Reserve interest rate drop in March 2024 increased from 21.5% to 40%.
Investors are now awaiting US GDP growth data, which is anticipated to show a 5% growth rate in the second reading, up from 2.1% in the first quarter. The report is expected later today.
