USD Stronger Ahead of All-Important Fed Decision

The US dollar gained against its major peers today, including the euro, the Great Britain pound and the Japanese yen. The market prepares itself to the policy announcement from the Federal Reserve tomorrow.

The Fed is going to announce its all-important decision about monetary policy tomorrow. Most market participants anticipate an interest rate lift-off, and today’s economic data did little to discourage such way of thinking.

While the headline Consumer Price Index was unchanged last month from the month before, in line with expectations, it grew 0.5 percent from the same month a year ago. What was perhaps even more important, the core CPI was up 0.2 percent in November on a monthly basis and climbed 2 percent on an annual basis. The data suggests that inflation exists in the United States despite the downside pressure from energy prices.

EUR/USD dropped from 1.0990 to 1.0905 as of 17:18 GMT today after reaching the high of 1.1057 intraday. GBP/USD slid from 1.5141 to 1.5049. USD/JPY climbed from 120.97 to 121.70, bouncing from the daily low of 120.60.

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