The US Dollar is Longer, This Happens in the Currency Market!

<p>&nbsp;The US dollar hit a three-month low against several currencies on Tuesday as traders continued to reduce their long US dollar positions ahead of US and European zone inflation data this week.</p><p><br /></p><p>The US dollar index, which measures the US dollar against six major currencies, traded at 102.875, lower than the 103.07 level recorded in Asian trade, the lowest since August 31.</p><p><br /></p><p>The index lost more than 3% in November, which was also its worst performance of the year.</p><p><br /></p><p><br /></p><p>The euro and sterling remained steady overall with the currency trading at $1.0974 and the pound at $1.2656, both around their three-month highs.</p><p><br /></p><p>Market expectations that the Fed's rate hike cycle has finally come to an end also put downward pressure on the US dollar. US rate forwards show about a 25% probability that the Fed could start cutting rates as early as March and rise to about 50% by May, based on the CME FedWatch tool.</p><p><br /></p><p>Traders are keeping an eye on the US core personal consumption price index (PCE) this week for further confirmation that inflation is slowing.</p><p><br /></p><p>On the other hand, after postponing its policy meeting until this Thursday, OPEC+ is considering further reductions in oil production. The yen was slightly firmer at 148.45 against the US dollar, continuing its recovery.</p>