USD falls on dovish remarks by Fed's Powell
Synopsis: The USD weakened against major currencies due to Federal Reserve concerns about interest rates. Inflation cooled, with the US core PCE at 3.5% in October. India's INR remained strong amid accelerated factory growth.
� The USD closed the week lower against major world currencies as Federal Reserve Chair Jerome Powell struck a cautious tone on further interest rate moves, stating that the risk of under- or over-tightening is now more balanced.
� The USD found support during the week as inflation cooled, aligning with predictions.
� In October, the U.S. core PCE, the Federal Reserve�s preferred gauge for inflation, decreased in line with expectations to 3.5% annually, down from 3.7% in September.
� The US Consumer Price Index, another key inflation indicator, cooled more than expected, dropping to 3.2% in October.
� Alongside this, personal spending growth slowed, indicating that the US economy is on a trajectory towards cooling inflation and a soft landing.
� Federal Reserve Governor Christopher Waller suggested a dovish pivot, stating that if inflation continues to cool, the Fed could consider cutting rates.
� Meanwhile, the INR held its ground as data revealed an acceleration in factory growth in November after a recent dip, supported by robust demand.
� India�s manufacturing PMI rose to 56 in November, up from 55.5 in October, marking almost 2 1/2 years above the 50 level, which separates expansion from contraction.
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