Forex Today: US Dollar’s doom and gloom

What you need to take care of on Wednesday, December 14:

The US Dollar collapsed following the release of the United States Consumer Price Index. According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) rose by 7.1% on a yearly basis in November, easing from 7.7% in October. In the same period, core CPI, which excludes volatile food and energy prices, rose by 6%, below the 6.1% expected.

The encouraging figures fueled speculation the US Federal Reserve will slow the pace of tightening and maybe announce the end of the current tightening cycle. Wall Street soared ahead of the opening, with the DJIA adding over 600 points but trimming most of its gains ahead of the close. Nevertheless, the Greenback remained on the back foot and near its recent multi-month lows.

The EUR/USD pair hovers around 1.0620 after peaking at 1.0672. GBP/USD, in the meantime, trades at 1.2350, ahead of the UK November Consumer Price Index.

The Australian Dollar holds on to substantial gains vs the USD, with the pair trading at around 0.6850. USD/CAD is down to 1.3540.

Crude oil prices kept advancing, with WTI trading at $75.20 a barrel. Oil surged after OPEC trimmed its forecast for oil demand by 140,000 bpd for the current quarter, citing slowing activity in China. OPEC also cut Q1 2023 forecast by 410,000 bpd.

The USD/JPY pair is down to 135.50, while the USD/CHF trades at 0.9290.

Spot gold peaked at $1,824.53 a troy ounce, now hovering around $1,810.00.

On Wednesday, the focus will be on the US Federal Reserve. The central bank is expected to hike rates by 50 bps and could anticipate the end of the tightening cycle. Chairman Jerome Powell has anticipated there’s a good chance the central bank will slow the pace of tightening as soon as in this meeting, and the encouraging inflation outcome for sure exacerbated the idea.

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