The dollar weakened for a seventh day after dovish Federal Reserve remarks boosted bets for a halt in rate hikes ahead of key US inflation data.
The greenback slid while Treasury yields consolidated following dovish comments by Fed Bank of Atlanta President Raphael Bostic and Fed Governor Christopher Waller; most other currencies traded within narrow ranges as investors await further policy cues from the CPI data due later Thursday.
The dollar has corrected lower as dovish Fedspeak drove a rebound in Treasuries, "but its too early to conclude this is the start of a USD downtrend," said Carol Kong, a strategist at Commonwealth Bank of Australia in Sydney. "Tonight's US CPI could again change the narrative and push the USD back up".
The Bloomberg Dollar Spot Index fell 0.1%, adding to a near 1.1% drop in the index through the past seven days.
US 10-year Treasury yields was little changed at 4.57%.
"A downside surprise to CPI inflation will likely support the case for the FOMC to have finished its tightening cycle, thereby pulling down US yields and the USD," CBA strategists Kong and Joseph Capurso wrote in a note to clients. "On the flip side, an upside surprise will likely encourage markets to reprice higher the chance the FOMC will follow through on its projected 25bp hike".
AUD/USD rose 0.2% to 0.6427 after data showed consumers expect inflation to rise to 4.8% over the next 12 weeks, compared to 4.6% in September.
Source : Bloomberg
