Pound strength continues amid dollar weakness
The British pound rises as the US dollar weakens further.
As November wraps up, the U.S. dollar is on a bit of a slide, looking at its biggest monthly drop in a year. Traders will be keeping a close eye on economic signals this week to figure out what might happen with future policy rates.
This week's schedule is packed – a delayed OPEC+ meeting, the Federal Reserve's inflation numbers, and consumer prices from Europe and Australia. Plus, a rate decision from the Reserve Bank of New Zealand and Chinese PMI data.
The dollar index slipped down by 0.2% to 103.22, heading for a monthly loss of over 3%, its worst in a year.
Traders, back from Thanksgiving, are watching for a potential peak in U.S. rates and wondering when the first rate cut might come. This week's release of U.S. core PCE prices should give more clues.
Market talk using the CME FedWatch tool suggests about a 23% chance that the Fed might start easing monetary policy as early as March.
The British pound continues to do well, hitting a more than two-month high of $1.2627 (GBP/USD) against the weaker dollar. This follows last week's news that British companies unexpectedly reported a bit of growth in November after three months of decline.
The recent PMI data in the UK is positive, suggesting things might not be as bad as they seemed. Sterling is looking at a solid 3.8% gain for the month, its best since a more than 5% rise in November last year.
