● The USD ended the week lower after the release of the US inflation report.
● U.S. prices fell in November for the first time in more than 3-1/2 years, pushing the annual increase in inflation further below 3% and boosting financial market expectations of an interest rate cut from the Federal Reserve next March.
● However, Fed speakers have pushed back on expectations of several rate cuts early next year after the Federal Reserve interest rate decision last week showed that the Fed was looking to cut rates three times in 2024.
● Data released on Thursday showed gross domestic product increased at a 4.9% annualized rate last quarter, revised down from the previously reported 5.2%. The consumer spending element of third-quarter GDP was revised downward to 3.1% from 3.6% in the previous estimate.
● INR ended the week lower against the USD as oil prices have been on the rise in recent sessions on concerns over supply disruption in the Red Sea.
● Many major shipping firms and oil transporters have halted routes across the Red Sea after several attacks by Houthi militants on ships.
●
Worries are rising
about disruptions to trade via the Suez Canal, which is the shortest shipping
route between Europe and Asia and accounts for 15% of global fishing shipping
traffic.
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