FOREX

The US dollar is on its fourth consecutive session of losses as Wednesday’s trading gets underway in Europe. The index that measures the performance of the greenback versus a basket of other major currencies has dropped more than 3% since Friday, in a clear indication of some repositioning from investors. Expectations that the Federal Reserve will pivot to a less aggressive stance have been growing, with December as a potential point of inversion for the ongoing monetary tightening. The latest US inflation figures, to be released tomorrow, will either intensify or dissipate hopes of a change of paradigm by the American central bank. In the meantime, the mid-term election results remain unclear, with the likely scenario of a Republican dominated congress also contributing to the dollar weakness, as it may translate into lower government spending, creating scope for a more accommodating Fed.

Ricardo Evangelista – Senior Analyst, ActivTrades      

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