The U.S. dollar sold-off across the board amid falling U.S. Treasury yields following the lower-than-expected U.S. inflation data report last week. The lower inflation print eliminated the likelihood of further monetary policy tightening by the Federal Reserve, giving traders green light to begin pricing in more rate cuts next year.
The weakening dollar in turn, boosted other currencies such as the euro which climbed above 1.09 and seems to be on its way towards a test of 1.10 now.
The British pound lagged behind in its upward trend against the greenback and finds itself still between 1.25 and 1.24. A break above 1.2550 could open the door for a run towards 1.2620 and possibly even 1.2680.
This week there are no high-impact events scheduled for release with a shorter trading week in the U.S. because of the Thanksgiving holiday on Thursday and Friday. The absence of high-profile events could translate into consolidation of the recent market moves with the potential for further upside for the euro, DAX and pound.
We recommend traders not to expect too much in the next days, take smaller profits or even do a trading break.
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