Dollar slips slightly against euro amid US inflation data

The dollar fell slightly in volatile trading on Tuesday as investors awaited US inflation data due this week, with the European currency hitting 1.05646 euros against the dollar.

At the same time, the Australian and New Zealand dollars rose significantly after China announced it would adopt a “proportionately accommodative” monetary policy for the coming year.

While markets expect the Federal Reserve to cut interest rates by a quarter point next week, investors are awaiting US consumer price data due on Wednesday.

Friday’s data showed US job growth rose in November but the unemployment rate rose to 4.2 percent, suggesting a slowdown in labour market growth, which could allow the US central bank to cut interest rates again this month.

Vishnu Varathan, a strategist at Mizuho Bank, noted that recent geopolitical developments such as the fall of Syrian President Bashar al-Assad, along with macroeconomic moves and US President-elect Donald Trump, are giving markets more impetus to continue buying the dollar.

China will adopt an appropriate and flexible monetary policy next year as part of measures to support economic growth, implement a more proactive fiscal policy and strengthen economic measures to address economic challenges, Chinese state media reported on Tuesday, citing a Politburo meeting.

The dollar rose 0.44 percent against the South Korean won.

Over the weekend, South Korean President Yoon Suk-yeol survived an impeachment vote in parliament after his failed attempt to impose martial law last week.

The Canadian dollar is near a four-and-a-half-year low as markets await further interest rate cuts.