US dollar declines under pressure from rate cut possibilities ‎

US dollar fell on Friday, while the euro rose after suffering significant losses overnight, as traders evaluated data that showed a decline in inflation, which increased expectations that raising interest rates had reached their peak and that central banks would soon begin reducing them.

According to Reuters, the dollar index, which measures the performance of the US currency against a basket of six competing currencies, fell 0.116 percent to 103.33 after recording its weakest monthly performance in a year in November, despite rising 0.6 percent overnight.

Data on Thursday showed consumer spending in the United States rose moderately in October, while the annual increase in inflation was the smallest in more than two and a half years.

The personal consumption expenditures price index rose three percent in October on an annual basis, a decline from a reading of 3.4 percent over three months, but the readings are still higher than the US Central Bank’s target of two percent.

US Federal Reserve policymakers indicated on Thursday that interest rate hikes were likely over, but they left the door open to further monetary tightening if progress in curbing inflation stalls.

Investors’ focus will shift to statements by Federal Reserve Chairman Jerome Powell later on Friday, scrutinizing every word in order to chart the course of the interest rate.

In Europe, data on Thursday showed that inflation in the euro zone fell more than expected for the third month in a row in November, which increased bets on a rate cut at the beginning of the spring.

The data led to a decrease in the euro by 0.7% on Thursday, and it rose in the latest trading by 0.21%, recording $1.0909. But the single European currency is down 0.2% this week

The British pound rose in recent transactions by 0.14%, recording $1.264.

The Japanese yen increased 0.06% to 148.09 per dollar and is on its way to record a third consecutive week of gains against the dollar, moving away from the lowest level in nearly 33 years that it touched in mid-November, which is 151.92.

The Australian dollar rose 0.06% to $0.661, and the New Zealand dollar rose 0.13% to $0.616.