Dollar Weaker on Thursday Following November Meeting Minutes

The US dollar (USD) continued its decline on Thursday following the release of the Federal Reserve’s November meeting minutes, bolstering the idea that the bank would shift gears and hike rates gradually starting at its December meeting.

A 50 basis point rate increase is expected to occur next month after four consecutive 75 basis point increases, according to the eagerly anticipated readout of the meeting on November 1-2.

After falling 1.1% on Wednesday, the dollar index (DXY), which compares the value of the dollar to six important peers, was down 0.2% at 105.75.

Although the Fed raised interest rates to levels last seen in 2008, somewhat lower-than-expected consumer price figures in the US have raised hopes for a slower pace of increases.

Dollar Index on Track for Worst Monthly Performance in 12 Years

The dollar index fell 5.2% in November as a result of these hopes, putting it on pace to record its worst monthly performance in 12 years.

In other news, the euro (EUR) clung to gains after information from the European Central Bank’s (ECB) October meeting revealed that policymakers anticipated future rate increases because they were concerned that inflation would become entrenched.

Sterling (GBP/USD) was trading at 1.2135, up 0.7% on the day, while the euro (EUR/USD) was recently up 0.2% at 1.0415. Although early British economic activity statistics outperformed expectations and revealed a decline was in progress, the pound gained 1.4% on Wednesday.

Meanwhile, after Sweden’s Riksbank increased rates by 75 basis points, as predicted in a Reuters poll, the euro lost 0.4% of its value against the Swedish krona (EUR/SEK). However, the Riksbank also hinted that further rate increases would be necessary to combat the country’s soaring inflation.