USD strengthened against other major currencies in the European session on Wednesday as investors waited for the release of the U.S. inflation report for October later in the day.
The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, inched up 0.04% from the previous close to 106.07.
Economists believe that today’s report, set to be released at 13:30 GMT, will show a rebound in price pressures in the U.S. in October with the headline inflation rate coming in a 2.6% YoY, up from 2.4% YoY in September. Meanwhile, the core inflation measure is predicted to remain unchanged at 3.3% YoY.
Hotter-than-anticipated data might prompt markets to trim their bets on the Federal Reserve’s policy easing in the short-term perspective.
According to CME FedWatch, markets now see a 62.4% probability of an additional 25-basis point rate cut in December 2024 and just 17.6% probability of a similar follow-on move in January 2025.