The US dollar fell slightly across the board on Wednesday as investors awaited inflation data and remained cautious about President-elect Donald Trump’s tariff pledges, amid portfolio rebalancing before the end of the month.
The dollar came under pressure after revised data showed the gross domestic product rose at a 2.8% rate in the third quarter, as expected and in line with the initial estimate. October durable goods orders also rose a smaller-than-expected 0.2%, while jobless claims were slightly lower than last week’s upwardly revised figure.
The weakening dollar lifted the euro 0.8% to $1.0568, while the euro/dollar pair hit its highest level in a week. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell to its lowest level since November 13 and was down 0.7% at 106.09.
The US Personal Expenditures (PCE) price index is due out at 10:00 a.m. EST/1500 GMT, which will be a key focus of the day, before US markets close for the Thanksgiving holiday on Thursday. Trump’s tariffs pledges on Monday have left investors jittery, with some analysts predicting that inflation risks could prevent more drastic changes.
Viktor Shvets, global head of desk strategy at Macquarie Capital, believes that Trump realizes that his win was largely due to concerns about inflation, inequality, and immigration, with prices being key. If prices do not improve, the electorate could seek revenge, and there is not much time, as mid-term elections will dominate within 12 months.
The dollar’s selloff accelerated after falling below the 200-day moving average at 151.998, analysts said. The outperforming yen benefited from bets for a December rate hike in Japan and position adjustments. The dollar’s weakness also lifted the pound 0.5% to $1.2864.
The dollar was little changed against the Canadian dollar, at C$1.4057, after touching a 4.5-year high of C$1.4177 on Tuesday. Against the Mexican peso, the dollar remained off its highest level since July 2022, standing 0.1% firmer at 20.696.
In cryptocurrencies, bitcoin rose 2.93% to $94,333, digesting its run up to almost $100,000 last week.
