Is the dollar getting weaker against the euro, the yen, and the pound sterling before the December U.S. inflation data?

The ICE-calculated index showing the dollar’s trend against six currencies (euro, Swiss franc, yen, Canadian dollar, pound sterling and Swedish krona) lost 0.15% during trading, while the broader WSJ Dollar Index lost 0.22%.

The dollar is getting weaker

The dollar is getting weaker. The euro/dollar pair is trading at $1.0767, up from $1.0757 at the close of the previous session. The U.S. dollar dropped to 131.60 yen at the same time, compared to 132.45 yen in the previous trading session. Pound-to dollar exchange rate rose to $1.2154 against $1.2146 the day before.

Today, traders’ attention is focused on the report by the U.S. Labor Department on last month’s consumer price movement in the country. The consensus forecast from experts polled by Trading Economics suggests that inflation in the U.S. slowed to 6.5% in December from November’s 7.1%.

Signals of weakening consumer price growth in the U.S. speak in favor of a further slowdown in monetary policy tightening by the Federal Reserve (Fed).

In this case, U.S. central bankers are in no hurry to abandon their hawkish stance: earlier this week, Mary Daly, president of the Federal Reserve Bank (FRB) of San Francisco, said in an interview with The Wall Street Journal that in their opinion, the Fed would have to raise the rate above 5% to achieve its inflation target.

Their colleague at the Atlanta Fed, Rafael Bostic, also confirmed their earlier opinion that the rate would be raised above 5%. Currently, its range is 4.25-4.5%.

The dollar/yuan pair exchange rate fell to 6.7566 yuan against 6.7650 yuan at the close of the previous session. China’s inflation accelerated to 1.8% y/y in December from 1.6% in November following a rise in food prices.

Earlier, we reported that S&P downgraded Coinbase with a negative outlook.