FX.co ★ Dollar Holds Decline Ahead of CPI Report

The US Dollar Index hovered around 101.7 on Tuesday after weakening in the previous session, as investors awaited the October Consumer Price Index report. Both headline and core inflation are expected to ease amid stabilizing energy prices.

Richmond Fed President Tom Barkin said on Monday that the central bank should proceed “with care” in adjusting monetary policy, emphasizing that persistent inflation remains its primary concern. Market pricing currently reflects an 84% probability of a Federal Reserve rate hike in December, up from about 74% a week earlier, following stronger-than-expected employment data released last week.

At the same time, safe-haven demand for the dollar diminished as oil prices continued to fall on growing optimism over a potential US–Iran peace agreement. President Donald Trump voiced confidence that the conflict involving Iran was nearing an end after talks with Qatar’s prime minister.