Dollar Turns Weak Ahead Of Fed Policy Announcement

(RTTNews) - The U.S. dollar shed some ground against some of its major counterparts with traders looking ahead to the Federal Reserve's monetary policy.

The Fed is widely expected to leave interest rates unchanged, but traders will be looking to the accompanying statement and projections for signs the central bank could begin cutting rates next year.

Data showing a slight uptick in consumer price inflation in the month of November helped the dollar to come off the session's lows.

Data from the Labor Department showed the consumer price index crept up by 0.1% in November after coming in unchanged in October. The uptick matched expectations.

Excluding food and energy prices, core consumer prices rose by 0.3% in November after edging up by 0.2% in October. The increase in core prices also came in line with estimates.

The report also said the annual rate of consumer price growth slipped to 3.1% in November from 3.2% in October, while the annual rate of core consumer price growth was unchanged at 4%.

Data on producer price inflation along with reports on retail sales and industrial production will be in focus later in the week after last Friday's strong than expected jobs data forced traders to lower bets for U.S. rate cuts to May from March 2024.

The European Central Bank (ECB), Bank of England (BoE), Norges Bank and the Swiss National Bank are all scheduled to announce their monetary policy decisions on Thursday.

The dollar index, which dropped to 103.49, recovered to 104.10 before turning weak again. The index was last seen at 103.80, down 0.28% from the previous close.

Against the Euro, the dollar weakened to 1.0796, and against Pound Sterling, it eased to 1.2567. The dollar eased against the Japanese currency as well, dropping to 145.51 yen, nearly 0.5% down from the previous close.

Against the Aussie, the dollar edged up marginally at 0.6560. The Swiss franc firmed to 0.8753 a dollar from 0.8783 a dollar. The dollar gained against the Loonie, fetching C$ 1.3591 a unit, as oil prices declined sharply.