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Investing.com – The U.S. dollar retreated in early European trade Friday, as a key inflation release added to expectations that U.S. interest rates have peaked.
At 04:40 ET (09:40 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% lower to 103.212, after clocking its weakest monthly performance in a year in November.
Dollar falls after PCE release
The eagerly awaited rose 3% in October from a year ago, according to data released on Thursday, falling from 3.4% the previous month.
This index is widely seen as the Federal Reserve’s preferred gauge of inflation, and although the reading was still above the Fed’s 2% target, the trajectory is clearly lower.
The main economic release Friday is the , while traders will also pay close attention to comments from Fed Chair later in the session, looking for clues of the central bank’s rate outlook.
“The FX market is set to remain highly sensitive to any activity data point, but there is a sense dollar bulls have survived the consumer spending and PCE risk, so that today’s ISM figures may not have a big impact – barring any big surprises,” said analysts…
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