The US dollar fell for the third day in a row since the beginning of this week, as the dollar index hit its lowest level since January 5 at 91.46 at the beginning of Friday trading, near the lowest levels since September 21 last year.
The US dollar has faced several challenges since the beginning of the week, starting with the Bank of Japan’s decision to pare purchases of Japanese government bonds, pushing the US dollar to its lowest level against the yen since Nov. 28. Then came the news of China's intention to slow down or stop buying US Treasuries, and yesterday the EUR rose against the USD significantly after the ECB hinted that monetary stimulus could be reduced, bringing the EURUSD back to the 1.20 levels.
Markets are today awaiting US inflation data, with Core CPI expected to stabilize at 1.7% in December on an annualized basis, and yesterday US PPI fell for the first time in almost a year and a half in December, reducing expectations of accelerated inflation during 2018, and thus may affect the pace of interest rate hikes this year.
