On Tuesday, the U.S. dollar experienced a decline of more than 1% against major currencies following the release of U.S. consumer price data, indicating a further moderation in the pace of inflation for October. The data raised speculation that the Federal Reserve might halt its interest rate hikes.
According to the Labor Department's Bureau of Labor Statistics (BLS), U.S. consumer prices remained unchanged last month, influenced by lower gasoline prices, in contrast to a 0.4% increase in September. The consumer price index (CPI) rose 3.2% in the 12 months through October, a decrease from the 3.7% rise reported for September.
The immediate response to the report saw a decline in the dollar and a subsequent plunge in Treasury yields. The benchmark 10-year yield dropped below 4.5%, removing a significant support factor for the dollar's strength throughout the year.
John Doyle, the head of trading and dealing at Monex USA in Washington, expressed the belief that the dollar is likely to continue weakening towards the end of the year, possibly extending into early January. The moderation in inflation, as reflected in the data, contributes to the perception that the Federal Reserve may adopt a more cautious stance regarding interest rate increases.