The dollar is experiencing a decline on Tuesday following remarks from a U.S. Federal Reserve official advocating for a rate cut at the upcoming December meeting.
On Tuesday morning, the American currency has depreciated by 0.19% against the euro, trading at 1.0519 dollars, and has also fallen by 0.15% against the pound, now valued at 1.2675 dollars.
Christopher Waller, one of the governors of the U.S. Federal Reserve, expressed his support on Monday for a further reduction in rates during the next meeting, rather than keeping them at current levels, despite a rebound in inflation within the United States.
“I am currently leaning towards a decrease in the benchmark rate at our December meeting,” he stated during a conference in Washington.
As a result, investors have increased their expectations for a quarter-point rate cut during the upcoming meeting scheduled for December 17-18.
On Monday, this probability closed at 76%, marking a 10-percentage-point increase from Friday, analysts noted.
The Federal Reserve’s main benchmark rate currently ranges from 4.50% to 4.75%, having been lowered twice since September—first by half a point and then by a quarter point.
The PCE index in the United States, a key measure of inflation that the Fed aims to bring back to 2%, rebounded in October to 2.3% year-on-year, up from 2.1% in September.
