News: FOREX-Dollar stays near three-month low, focus on inflation data

	  Dollar set for weakest month in a year  

	  Yen back from the brink; strongest month in 2023 

	  Inflation data takes the spotlight 

			  MORNING BID EUROPE: Treasuries on the cusp of best 
month 

since 2008

(Updated at 0545 GMT)

The dollar was rooted near a three-month low on Thursday and was set to post its steepest monthly decline in a year as investors ramped up bets that the Federal Reserve is done with rate hikes ahead of a crucial inflation report later in the day.

The dollar index =USD , which measures U.S. currency against six rivals, eased 0.058% to 102.74, not far from 102.46 - its lowest since Aug. 10 it touched on Wednesday.

The index is down 3.7% in November on growing expectations the Fed will cut interest rates in the first half of 2024.

The dollar clawed back some of its losses on Wednesday after data showed the U.S. economy grew faster in the third quarter than initially reported.

"I think it's still pretty much all about U.S. yields. And by extension FOMC policy," said Carol Kong, currency strategist at Commonwealth Bank of Australia.

"Markets will continue to focus on what FOMC officials say about the prospect of the upcoming rate-hike cycle."

Investors will be all ears on Friday when Fed Chair Jerome Powell takes the centre stage in the wake of Fed Governor Christopher Waller on Tuesday flagging a possible rate cut in the months ahead.

But before that, the spotlight will firmly be on Thursday's crucial personal consumption expenditure (PCE) price index - the Fed's preferred measure of inflation.

Christopher Wong, currency strategist at OCBC, said the data will offer a glimpse into whether the disinflation trend seen so far remains intact.

"If core PCE undershoots expectations to the downside, then USD may extend the move lower again."

U.S. financial conditions are the loosest since early September and have eased 100 basis points (bps) in a month, according to Goldman Sachs. The bank's global and emerging market indexes ticked up a bit last week, but financial conditions are also looser by around 100 bps from a month ago.

U.S. rates futures markets are now pricing in more than 100 bps of rate cuts next year starting in May, and the two-year Treasury yield US2YT=RR is its lowest since July - it has slumped nearly 40 bps this week alone.

Meanwhile, 10-year notes US10YT=RR are set for their strongest month since the 2008 global crash, with yields down 59 bps for November so far. In Asian hours, the yield on 10-year notes were last at 4.288%.

The weakness in the dollar has buoyed most Asian and regional currencies. Two of the best-performers are at the polar opposite ends of the 'carry' spectrum - the New Zealand dollar and Japanese yen.

The kiwi NZD=D3 got an extra boost on Wednesday following the central bank's 'hawkish hold' - policymakers kept the key cash rate at a relatively high 5.50%, but unexpectedly signalled that it could be raised again if inflation doesn't moderate.

The currency was 0.26% higher at $0.6172, staying close to the four month peak of $0.6207 it touched on Wednesday.

Meanwhile, expectations that the Bank of Japan will soon end its negative rate policy have pulled the yen up from the depths, and in the process, eased pressure on the central bank to support the currency via direct FX market intervention.

On Thursday, yen JPY=EBS strengthened 0.12% to 147.06 per dollar, remaining close to the two-and-a-half month high of 146.675 per dollar it touched on Wednesday. The Asian currency has firmed 3% against the dollar in November and is on course for its strongest month this year.

Bank of Japan board member Toyoaki Nakamura said on Thursday the central bank will likely

need some more time

before phasing out its massive stimulus.

Sterling GBP=D3 was last at $1.2696, up 0.02% on the day, while the euro EUR=EBS was down 0.01% at $1.0967 ahead of inflation data from euro zone.

The Australian dollar AUD=D3 rose 0.31% to $0.6637 and is up 4.7% in November - its steepest one-month gain in a year.

	======================================================== 
	Currency bid prices at 0545 GMT 

 Description	  RIC		 Last		   U.S. Close  Pct Change	 YTD Pct	 High Bid	Low Bid 
											  Previous				   Change				  
											  Session											
 Euro/Dollar	   EUR=EBS	$1.0965		$1.0969	 -0.03%		 +2.34%	  +1.0984	 +1.0966 
 Dollar/Yen		JPY=EBS	147.0950	   147.3050	-0.14%		 +12.09%	 +147.1800   +146.8700 
 Euro/Yen		 																			 
 Dollar/Swiss	  CHF=EBS	0.8734		 0.8737	  -0.02%		 -5.54%	  +0.8739	 +0.8718 
 Sterling/Dollar   GBP=D3	 1.2693		 1.2695	  +0.02%		 +4.99%	  +1.2705	 +1.2692 
 Dollar/Canadian   CAD=D3	 1.3582		 1.3589	  -0.07%		 +0.22%	  +1.3594	 +1.3576 
 Aussie/Dollar	 AUD=D3	 0.6637		 0.6617	  +0.32%		 -2.63%	  +0.6648	 +0.6617 
 NZ				NZD=D3	 0.6166		 0.6156	  +0.17%		 -2.88%	  +0.6182	 +0.6154 
 Dollar/Dollar																				   

All spots FX= Tokyo spots AFX= Europe spots EFX= Volatilities FXVOL= Tokyo Forex market info from BOJ TKYFX

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World FX rates	https://tmsnrt.rs/2RBWI5E 

Dollar's weakest month in a year https://tmsnrt.rs/47yi2jx

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