The decline in the dollar at the start of Friday’s European trading session continued the decline after U.S. inflation fell more than expected and sterling rose after a slight slowdown in the third quarter.

The dollar index, which tracks its rate against a basket of six other currencies, traded 0.5 percent lower, at 107.50, falling to its lowest level since mid-September after losing more than 2 percent in the previous session.

When does the dollar lose value? This wave of dollar weakness was triggered by data released Thursday showing that U.S. consumer price inflation (CPI) rose 7.7% in October, the slowest pace in nine months, indicating that the Federal Reserve’s series of steep interest rate hikes this year has finally had the desired effect.

That raised expectations that Fed officials might decide to moderate the central bank’s determined campaign of monetary tightening earlier than expected, raising it by just 50 basis points in December instead of another 75-basis-point increase.

“The CPI data will not be the final argument for this decision (we will have U.S. employment data and another CPI release before then), but it could set the tone regarding the comfort level for the Fed,” ING analysts said in a note.

Earlier, we reported that the European economy in 2022 is at a tipping point.