On Wednesday, the dollar fell from a one-week high ahead of Federal Reserve Chair Jerome Powell’s speech. At the same time, optimism about possibly loosening China’s COVID restrictions set it on track for its huge monthly loss since late 2010.
In the Eurozone, inflation in November slowed for the first time since June of last year, with harmonized consumer prices rising by only 10%, compared to expectations for an increase of 10.4% in November and 10.6% in October.
It is still higher than the European Central Bank’s target rate. However, after nearly two years of near-constant inflation, markets may welcome any indication that the worst is over.
On Tuesday, European assets rose after inflation in Spain, and several major German states fell. The euro was last up 0.4011% at $1.0366, having risen from a one-week low of $1.0319 earlier in the day. It fell 0.1% against the sterling to 86.30 pence.
The US Dollar Index, which measures the greenback’s performance against six major currencies, fell 0.37% to 106.48, from an overnight high of 106.90.
It fell 4.3% in November, its worst monthly performance since September 2010.
The dollar rose 0.2% against the yen to 139.011, as the pair continued to consolidate after recovering from a three-month low of 137.50 on Monday. The pound rose 0.4% to $1.2002.
As the government’s zero-COVID policies continue to stifle economic activity, data from China indicate that manufacturing was weaker than anticipated. The dollar fell 1% to 7.0802, and the offshore yuan grew against it.
To remove unpopular “zero-COVID” curbs that have recently sparked violent protests, Chinese health officials announced Tuesday that they would speed up COVID-19 vaccinations for the elderly.
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