The US dollar looked strong in the New York session yesterday as the latest inflation reading published was in line with the forecast.
The annual US consumer price index (CPI) for November showed an increase to 2.7% as expected by the market compared to 2.6% in the previous month.
Monthly inflation also met the forecast to increase to 0.3% and the core reading remained as expected at 0.3%.
With the assessment of the latest inflation report, the CME FedWatch indicator showed an increase in the percentage to 94% for the Federal Reserve (Fed) to implement an interest rate cut of 25 basis points at the December meeting.
Market analysts also saw an additional factor supporting the strengthening of the US dollar is the report that China is considering allowing the Yuan currency to weaken next year.
This is due to China's preparations to face the implementation of higher tariffs by the Donald Trump administration after being warned previously.
Also in focus in the New York session yesterday following the US CPI data was the Bank of Canada (BOC) policy meeting decision which was in line with expectations to continue cutting interest rates aggressively.
Like the last October meeting, the BOC acted to continue cutting interest rates by 50 basis points from 3.75% to 3.25%.
BOC Governor Tiff Macklem believes that monetary policy at this time no longer needs to be in a tightening phase and that the previous interest rate cut will have an impact on the economy in the future.
Today (Thursday), the market will be watching the results of the Swiss National Bank (SNB) and European Central Bank (ECB) policy meetings which are expected to lower interest rates by 25 basis points to 0.75% and 3.15% respectively.
In the Asian session this morning, investors are evaluating the reading of the Australian jobs report which saw positive figures.
Australia's job growth in November rose to 35,600, beating expectations of 26,000, while the unemployment rate fell to 3.9% from 4.1% in the previous month, and was better than the forecast for an increase of 4.2%.
This has had an impact on the Aussie dollar's initial surge in Asian trading.
In the New York session tonight, US producer price index (PPI) data will follow for investors to assess whether this latest reading is in line with the consumer CPI published yesterday.
